State-run National Small Industries Corporation today said it expects a 25 per cent jump in sales of raw material to MSMEs to Rs 6,000 crore by the end of FY11 through expansion of its distribution network and product portfolio.
"We are expecting 25 per cent jump in our raw material distribution business to Rs 6,000 crore by end of this fiscal from Rs 4,300 crore in the last fiscal in view of opening more centres and adding more raw materials,” NSIC Chairman and Managing Director H P Kumar told reporters here today.
With the intention of making adequate raw material available to Micro, Small and Medium Enterprises (MSME), NSIC has decided to set up ten more raw material distribution centres across the country, including Kolkata and Nagpur. Presently, it has 40 such distribution centres.
NSIC will also supply coal, plastic and non-ferrous material to MSMEs. "For plastic products such as HDP and LDP granules, we have written to Indian Oil and GAIL to allocate us bulk supply (at least 20,000-30,000 tonnes) so as to supply it to the MSME sector. We have seen there is a great demand from small industry for plastic material," he said.
NSIC has also tied up supply of 2 million tonnes of coal from Coal India for distribution to small industries. "We have also asked states governments to nominate NSIC for supplying raw material to small industries," he said.
On the issue of reserving 20 per cent of procurement contracts awarded by government departments, including PSUs, for MSMEs, Kumar said that it may become law within the next three to six months.
"The rules regarding making compulsory 20 per cent of total procurement by government departments from MSMEs are expected to be notified under MSME Act within next 3 to 6 months," he said, while adding that all the grievances of the government departments have already been addressed.
"This proposal (20 pc procurement) is presently at the consultation stage and it will soon go to the Cabinet for its approval," he said.
"Initially, the government departments, including PSUs, railways and defence, will be given time for three years for raising their procurement from MSMEs to 20 per cent out of total buying," he said.