Friday, December 13, 2013: The public procurement policy will be reviewed by the ministry of micro small and medium enterprises (MSME) both on national and state level.
Sources close to the matter told Business Standard that the ministry has proposed to suggest all states to come up with public procurement policy at the state government level to facilitate a demand pull growth in the segment.
At present, barring defence, every ministry has to procure a minimum of 20 per cent of annual value of goods and services from micro and small enterprises. But many of these ministries still have to come up with a worthy procurement plan.
The concern has arisen seeing the decline in the share of MSMEs’ in the GDP, manufacturing output and exports. The way MSMEs are structured, they are not fully able to counter demands of time and resources as efficiently as their larger counterpart. Hence, most of them operate in an informal and unregistered segment, which is growing much faster than the organised segment that accounts for above 95 per cent of all MSMEs. This was suggested by an interdepartmental report.
This review will help resolve the issue so that central government ministries adhere to procurement guidelines strictly. The official sources further shared that in a high level meeting of the state governments to be held, the proposal for a state level procurement policy will be discussed to enlarge the market for MSEs.
One of the biggest issues that will be discussed will be to counter the imports of electronic system and design management sector. Ministry has pushed Department of Electronics and Information technology to take measures to block technically inferior products from entering the country.
Additionally, a number of central government ministries have been asked to identify major imports of their respective areas whose manufacturing includes low to medium end technology, the report added. This will help in product specific schemes to incentivize domestic manufacturing of those products under the product procurement policy.
