Industry body Assocham today asked the government to make it mandatory to source 15 per cent of its entire purchase from the Micro, Small and Medium Enterprises (MSME) sector as the move would help in creating about 10 lakh new jobs.
The move would also facilitate MSMEs to enhance their capacity expansion, the chamber said, adding the sector is currently operating at less than 70 per cent of its capacity due to lack of supply orders.
"Approximately 10 lakh additional jobs can be generated in MSMEs provided government makes it mandatory to source 15 per cent of its entire purchase from them, without any preferential treatment," it said.
Assocham said that the inter-ministerial difference over the issue has been already resolved.
"The government should immediately make it compulsory with issuance of necessary directives to this effect to all departments including its public sector undertakings," it added.The move would not only create demand for MSME products and also assure them monetary supplies.
MSMEs contribute about 40 per cent to the country's total exports, 45 per cent in manufacturing and employs about 6 crore people.
The sectors where job creation is expected, include auto, engineering, financial sectors and IT.
The MSME ministry had circulated a Cabinet note proposing that at least 20 per cent of the non-strategic purchases of government departments and public sector units be sourced from small and medium units.
