World Bank to Ramp up MSMEs in Goa

Total Outlay on MSME sector with a report on Go

With 63.4 million units spread across the country, the MSME sector contribute around 6.11% of the manufacturing GDP, and 24.63% of the GDP from the service activities. The MSME sector has really acted as bulwark for Indian economy, projecting it as ‘Atmanirbhar Bharat’.

In the interim budget 2024-2025, it was announced the establishment of a corpus totalling Rs. 1 lakh crore (US$ 11.99 billion), offering 50-year interest-free loans. This initiative aims to incentivize the private sector, particularly MSMEs, to enhance research and innovation in emerging sunrise domains. 

Whereas during budget 2023-24, government revamped credit guarantee scheme for MSMEs to take effect from April 1, 2023 through the infusion of Rs. 9,000 crore (US$ 1.09 billion) in the corpus. This scheme would enable additional collateral-free guaranteed credit of Rs. 2 lakh crore (US$ 24.41 billion) and also reduce the cost of the credit by about 1%.

Thus, with the immense capacity of MSMEs for driving economic growth and development at regional, national, and global levels promoting and raising the competitiveness of MSMEs nationally and globally becomes an imperative to achieve long term sustainable and balanced growth.

Perusing the growth of the sector, and complementing Atmanirbhar Bharat, World Bank in association with Ministry of MSME’s introduced RAMP- Raising & Accelerating MSME Performance, and “Implementing MSME competitiveness Programme- post Covid Resilience and Recovery Programme (MCRRP)”, which aims at strengthening schemes that focus on improving market access, access to credit, strengthening institutions and governance at the Centre and State, improving Centre-State linkages and partnerships, addressing issues of delayed payments, and greening of MSMEs.

The total outlay approved under RAMP is for INR 6062.45 crore out of which INR 3750 Crore is a loan from the World Bank and the remaining INR 2312.45 Crore is the counterpart funding by Government of India. Since then out of 34 States/ UTs that have participated in the RAMP Program, 22 States, have submitted the Strategic Investment Plans (SIPs). SIPs received from 10 States (Tamil Nadu, Odisha, Sikkim, Mizoram, Maharashtra, Uttar Pradesh, Bihar, Madhya Pradesh, Andhra Pradesh and Karnataka) have been evaluated and a grant of Rs.1143.55Cr has been approved as part funding for selected projects in these States.

Since its launch, there is been a significant increase in the number and amount of guarantees to MSEs under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Scheme of the Ministry of Micro, Small and Medium Enterprise. All this came alongside M/o MSMEs three new sub-schemes to facilitate affordable credit to micro and small enterprises for greening investments and dispute resolutions.

Is the RAMPs focus moving to Goa?? Since the Micro, Small & Medium Enterprises (MSMEs) have been contributing significantly to the expansion of entrepreneurial endeavors through business innovations in Goa, presumably a most sought after tourist destination. The MSMEs are widening their domain across sectors of the economy, producing diverse range of products and services to meet domestic as well global market demands. However the sector is not formalized, and many businesses are not informed about the formalization initiative by Ministry of MSME and the State.

It’s been noted that the industries department want to map all the existing MSMEs in Goa, which could help identify the type of product and services manufactured and offered in states. Loans to small and medium industries in Goa grew by nearly 30% in the last quarter, worryingly the data released by World Bank shows the repayment issue from stressed MSMEs.

Although, 33,389 MSMEs are registered on Udyam out of which 95.91% are micro enterprises and registered MSMEs are majorly looking forward for finance and marketing assistance. The share of Manufacturing and Service sector for MSMEs in goa is 18.50% and 81.50% respectively. Coming on to figures, Goa recorded over $2.15 Bn worth of exports in 2022-23. And is among top 3 states with highest Per Capita Net State Domestic Product ($6,653) in India. Goa is the most urbanized state in India with 62.17% urban population with FDI inflow in Goa stood at US$ 118.98 million.

Having said that Goa has been actively implementing MSME schemes of Center and State benefiting the enterprises.