CII lists a host of steps to make procurement policy from MSME a success

From April 2015, all PSUs are directed to procure at least 20% of their product & service requirements from MSME

Concerned about a majority of state-owned firms not meeting the norm of 20 per cent procurement from micro and small enterprises, CII has called for a strong coordination mechanism between the ministry of MSME and other stakeholders.

The industry body is in the process of submitting a set of suggestions to the micro, small and medium enterprises (MSME) ministry which it believes could have the desired impact on the policy objectives. 

From April 2015, all PSUs, central government ministries, and departments are directed to procure at least 20 per cent of their product and service requirements from micro and small enterprises.

Of the 20 per cent, the policy has earmarked a sub-target of 4 per cent procurement from micro and small enterprises (MSEs) owned by SC/ST entrepreneurs.

According to the data from the ministry of MSME, some 133 PSUs submitted data on total procurement and the one from MSEs during 2014-15. Of these, only 43 central public sector enterprises (CPSEs) complied with the mandatory procurement guidelines.

"A strong institutional framework with adequate bandwidth and resources, enabling IT tools and platforms and a robust monitoring mechanism must be created in order to effectively implement the policy," a white paper prepared by CII said.

The paper called for creation of a centralised database of MSE vendors in the country. It also suggested that the list of 358 items reserved for exclusive procurement from MSE vendors be updated and extended.

According to the proposed measures, the MSME ministry should create a product-wise list of MSE vendors under the 358 reserved items in order to facilitate identification.

"The ministry must undertake measures for training MSE vendors as well as PSUs and their procurement officers in order to inculcate sensitivity among them to efficiently deal with each other. Special measures must be undertaken by the ministry in order to identify and enlist the SC/ST vendors within the MSE category," the paper stated.

It further suggested that testing labs be set up in states to ensure MSE vendors can meet the quality criteria of PSUs and pitched for the inclusion of state-owned PSUs that are currently off the policy ambit.

The paper also proposed that the qualification criteria need to be relaxed for MSE vendors to provide them with a level playing field against their larger counterparts.

It pitched for the government taking necessary steps to encourage MSMEs across the country to get themselves registered and consider bringing medium-scale enterprises under the purview of the policy.