The procurement policy for the MSME sector will soon be taken up by the Union Cabinet. Under the proposed policy, it will be mandatory for all the government departments and Public sector units (PSU’s
The procurement policy for the MSME sector will soon be taken up by the Union Cabinet. Under the proposed policy, it will be mandatory for all the government departments and Public sector units (PSU’s) to outsource 20 % of their procurement requirements from SME units, though the defense sector might be exempted, under this policy.
“The policy may set a goal for government departments and PSUs to reach, over a stipulated period, a target of at least 20% of their annual volume of purchases from micro and small enterprises (MSEs),” says the report by task force which was submitted to the Prime Minister in January.
The task force chaired by Prime Minister’s principal secretary T.K.A. Nair recommended the need for a procurement policy on these lines as it may enhance the growth and expansion of the SME sector in the country and further make them more competitive not only in the domestic but also in the international market.
“While India continues to be a growing market cheap imported goods have a direct impact on the MSEs and their survival. Given the globalization, governments across the world are providing supportive measures to the MSEs through targeted benefits and facilities. In line with the practice internationally, a Public Procurement Policy for MSEs is vital to ensure a stable market for the MSEs,” the report of the Task Force further added.