The government may soon make it mandatory for the state-owned companies to buy at least 20 per cent of their total purchases from micro and small enterprises.
"We are preparing a Cabinet note to encourage the micro and small sector," Secretary in the Micro, Small and Medium Enterprises Ministry Dinesh Rai told reporters after inaugurating a Design Clinic Scheme here today.
As per the proposal, all public sector companies, including the railways and entities under the Defence Ministry, would have to procure 20 per cent of their total requirements from the micro and small sector enterprises (MSEs).
Recently, a Committee of Secretaries was set up by the government for arriving at a consensus on the formulation of the procurement policy.
"The Committee of Secretaries, which met on February 11, has agreed and now there is a general consensus on it (policy). Now, everybody has agreed for 20 per cent procurement in three years," the Secretary said.
A few government departments have been concerned about the quality standards of products manufactured by the MSEs.
However, referring to the MSE sectors' contribution in the automobile sector, Rai said, "...We do not want to compromise on quality. The MSE sector has always shown that they can match the best international quality."
Madhav Lal, Additional Secretary and Development Commissioner, MSME Ministry said, "We hope that the policy will be in place within the next six months time."
Lal said, "The PSUs should have a goal of achieving 20 per cent of their total procurement from micro and small enterprises in three years."
In September 2009, Prime Minister Manmohan Singh had formed a task force on micro, small and medium enterprises, headed by Principal Secretary T K A Nair, to provide relief to the sector badly hit by the global slowdown.
The MSME task force report, submitted to the Prime Minister recently, recommended easing credit flow to the sector, formulation of procurement policy, a benign tax regime and labour reforms.
The MSME sector, which contributes 45 per cent to the country's industrial output and 40 per cent to exports, employs 42 million people.
