MSME vendor development programme to generate awareness about govt’s public procurement policy

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The programme aims to develop linkages between small and large enterprises and provide opportunity to SMEs to showcase their capabilities

According to the Public Procurement Policy for Micro & Small Enterprises (MSEs), which has been in force since April 2012, every department under the Central ministries or public sector undertaking (PSUs) will have to source at least 20 per cent of their total annual procurement through micro and small enterprises (MSEs) only. A policy introduced by the Ministry of Micro, Small and Medium Enterprises (MSME) called the National Vendor Development Programme (NVDP) way back in 1995, happens to be well aligned with this Central government initiative. So to give impetus to this programme, which remained on the back burner, MSME has started aggressively promoting it over the last few months.

There are two types of vendor development programmes (VDPs) being organised through field offices namely Micro, Small and Medium Enterprises Development Institute (MSME-DI)—national level and state level VDPs. The national level programmes are organised over three days during which micro and small/medium enterprises interact with large scale organisations such as BEL, BHEL, TELCO, BSNL, NHPC, NTPC, defence, railway, etc., and establish themselves as potential vendors. Business enquiries ranging from Rs 5 million to Rs 200 million per VDP is being generated through NVDPs.

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Under the same model, MSME-DI has also launched state level vendor development programmes (SVDP) to help business promotion and industrial development.

Objectives of NVDP

The aim of the programme is to develop linkages between small and large enterprises. “The objective is to provide an opportunity to SMEs to showcase their capabilities to various wings of government organisations such as railways, defence establishments, PSUs, and other large-scale private enterprises that outsource to micro and small enterprises,” informs Sandeep Agarwal, assistant director, MSME-DI.

The second objective is to enable large-scale enterprises to identify suitable vendors in the MSME sector to forge ‘vendor-vendee’ relationships. The third objective is inform the educated youth about the opportunities in the MSME sector. This programme therefore aims to develop potential SMEs as vendors for Central ministries.

How the ministry can help

MSME-DI is helping SMEs by developing ties between buyers and sellers, hence providing opportunities to identify various potential products, develop services and evolve indigenised marketing strategies.

MSME, along with different associations, has been organising events and exhibitions where vendors can display their products and also organise interaction meets with the sellers. These activities are being conducted across the country to generate awareness about the government’s procurement policy. In the past three years, an approximate number of 50 NVDPs have been conducted across the country covering automobile products, electrical and electronics machinery, components, etc.

MSME-DI, Delhi, has so far conducted three programmes in Delhi, while one programme has been lined up to be held in Ghaziabad. These are being organised in association with the National Small Industries Corporation (NSIC) and the Small Industries Development Bank of India (SIDBI). Nine programmes under SVDP have also been conducted in Delhi-NCR.

Recently, the MSME along with the Delhi Printers’ Association had conducted such a programme at its MSME-DI extension centre, Connaught Place.

“Though the public procurement policy has been in place for a few months, yet there has not been much awareness about this policy. So we are in the awareness-building mode, trying to explain the policy and its advantages. As an intermediary, our sole purpose is to help vendors find the right buyers. Seeing the lengthy procedures and stringent policies, generally, SMEs are hesitant to approach government organisations. Hence, with this platform we are trying to bridge the gap and help individual vendors understand the procedures and policies of PSUs,” shares Sandeep Agarwal.

How one can benefit from these programmes
For a vendor or supplier, a major problem faced is identifying target buyers. Hence, this programme gives vendors the opportunity to meet many potential buyers under the same roof. Through various interactions and business meets, vendors can easily understand buyers’ requirements. These programmes help vendors to clearly understand the schemes and policies designed for the promotion and development of MSMEs, for export promotion and market development. Informs Sandeep Agarwal, “Approximately, 4-5 per cent of the government’s total purchases come from SMEs. By raising this to 20 per cent, it will create a gap of Rs 3000 billion. Here lies immense opportunities for SMEs to grab and make the best use of. This sort of awareness needs to be generated among vendors.”

What an entrepreneur needs to do
To avail the benefits of this programme, the only criteria is that companies need to be registered as Small Scale Industries (SSI)/Entrepreneur Memoranda 2 (EM2). Interested entrepreneurs can register and participate with a minimal amount of Rs 6000, while a 50 per cent concession is provided to SC/ST enterprises amounting to Rs 3000. For Non-SSI, medium and large enterprises, there is a nominal fee charged. Entrepreneurs individually or along with an industry association can approach Ministry. However, companies (ranging between 5 and above) in the same industry segment can approach MSME-DI. This will help the MSME in finding the right partners.

In case individuals approach the Ministry, the ministry waits for a certain number of similar requests to be submitted before it arranges vendor meets.

Entrepreneurs interested in participating can approach MSME-DI, Okhla office (Shaheed Captain Gaur Marg, Opp. Okhla Indl. Estate, Okhla). Contact person: Sandeep Agarwal, assistant director, MSME-DI; Kamal Singh, deputy director (Mech) MSME-D, Ph: 011-26838118; dcdi-ndelhi.dcmsme.gov.in

Since we have indicated the ministry as MSME, for micro, small and medium enterprise, we have used SME.

By Richa Chakravarty

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