Government makes 20 per cent procurement from MSEs mandatory


Thursday, December 11, 2014: Kalraj Mishra, union minister for micro, small and medium enterprises (MSMEs) informed Lok Sabha, in a written reply on Monday, that it is mandatory to procure 20 percent of products and services from micro and small enterprises (MSEs) for all Central public sector units (CPSUs), Central Government Ministries and Departments.

He said, “The government has issued directions under the Public Procurement Policy for Micro and Small Enterprise (MSEs) Order 2012, to all the Central Public Sector Undertakings (CPSUs), Central Government Ministries and Departments for an overall procurement of minimum of 20 percent of products and services from Micro and Small Enterprises (MSEs) units.”He said that this procurement will come in effect from 1 April 2015 onwards.

As per the government release, certain efforts adopted by government to enhance procurement from MSEs involves, one on one interaction with CPSUs to enhance procurement of MSEs, stakeholder consultation workshops to be conducted to generate awareness and understanding of the policy, facilitating match making of buyers and suppliers, a software based upon ITC HS Code has been developed which is a copyright of this Ministry; setting up of grievance cell; review committed has been constituted and so on for development of MSME sector.

MSME sector accounts for 8 per cent of GDP and contributes around 40 per cent of the total exports and 45 per cent of the manufacturing output. According to the fourth All India Census of the Micro, Small and Medium Enterprises, there are total 36.176 million enterprises of the MSME sector, amongst which around 1.564 million are registered.