Gujarat’s Low Utilization of Central Funds for MSME Development Raises Concerns

27 Nov 2024 CW Team

Despite being a leading state for micro, small, and medium enterprises (MSMEs), Gujarat has been criticized for its poor utilization of central government grants meant for MSME development. According to official data, Gujarat received Rs 5 crore for preparing a Strategic Investment Plan (SIP) and Rs 47.06 crore under the Raising and Accelerating MSME Performance (RAMP) program from the central government. These programs, launched by the Prime Minister on June 30, 2022, are aimed at scaling MSME operations and fostering innovation.

As of June 30, 2024, Gujarat has utilized only Rs 0.66 crore of the Rs 5 crore allocated for SIP and has not used any funds from the Rs 47.06 crore earmarked for RAMP initiatives. Government sources stated that the preparation for SIP is still underway, and efforts are being made to expedite its implementation.

The SIP scheme aims to enhance the capacity and outreach of MSMEs, with a focus on improving market access and scaling up guarantees to women-owned micro and small enterprises. While 25 states and union territories have already received grants under RAMP, Gujarat’s low utilization of funds is raising concerns about the state's ability to fully capitalize on these opportunities.

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