Procurements from MSMEs to be 20 pc

Procurements from MSMEs to be 20 pc

As the Union Government gears up to implement the revised policy for public procurement after the Uttar Pradesh elections, Minister for Micro, Small and Medium Enterprises (MSMEs) Veerbhadra Singh hoped that the State Governments across the country will follow suit.

“We will notify the policy of reserving 20 per cent of procurements to be made from the MSME sector by the Central government departments and Boards, after the elections.

This will bring in nearly Rs one lakh crore into the sector for its growth,” he said. Of this 20 per cent, the government has made provisions for reserving four per cent of the procurement from firms run by the SC/STs. In all, as many as 84 Central departments and 184 Central boards will be ‘obligated’ to adhere to the notification.

The policy provides a grace period of three years to the departments and Boards to procure the requisite goods from the MSME sector. However, after the third year, it will be made mandatory.

He hoped that with the Centre taking the lead in the matter of reserving 20 per cent of its buying from the MSME sector, the State governments should also be encouraged to bring in such a policy in their departments.  The Union minister was in the City to inaugurate ‘Clikatronics’ 2012, a buyer-seller meet of the MSME sector at the World Trade Centre. He said there was an immediate need for the MSME sector to be encouraged as it was important for the growth of the country. According to Singh, the sector contributes nearly 45 per cent of the industrial output and accounts for 40 per cent of the exports.

Earlier, Amarendra Sinha, Additional Secretary and Development Commissioner, MSME, said there was an urgent need to ensure capacity building in the MSME sector to be able to take orders from the public sector units (PSU) or the Central Government departments. 

“While on the demand side we have so many boards and departments ready to procure the goods from the sector, where is the capacity to supply?” he said. He noted that after the Petroleum Industry, the import bills in the country were the highest in the electronics goods sector. “We have the innovation talent, but we need to translate it into production,” he said. 

Secretary to the MSME Department, R K Mathur, said the sector had lost a great chance to capitalise on the Electronics Revolution with a share of only 0.7 per cent of the $2.4 trillion electronics goods industry worldwide.