Govt considers 20% quota for MSEs in procurement

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A policy proposal to make it mandatory for the government departments and PSUs to source 20 per cent of their total procurement needs from micro and small enterprises (MSEs) is under consideration, minister for Heavy Industries and Public Enterprises Praful Patel said on Thursday.

“The (proposed) policy on procurement by Public Sector Undertakings (PSUs) through Micro, Small and Medium Enterprises (MSMEs) is under consideration of the government,” the minister said.

A task force on MSME chaired by the Prime Minister’s Principal Secretary, T K A Nair, had proposed the policy for MSEs to help them improve their bottom lines and broadly encourage such businesses in the country.

Among other things, it proposes making it mandatory to source 20 per cent of the total requirements of the government departments and PSUs through the MSMEs.

The task force had submitted its report to Prime Minister Manmohan Singh on January 2010.

The MSME sector employ about six crore people and contributes eight per cent to the country’s gross.

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