Ease of Doing Business for MSMEs: Central ministries, departments, and central public sector enterprises (CPSEs) have overachieved their annual procurement target of 25 per cent from micro and modest enterprises (MSEs) for the third consecutive year. Procurement from MSEs through FY21 stood at 31.25 per cent up from 30.17 per cent in FY20, and 26.32 per cent in FY19. FY18 purchases from MSEs have been 23.11 per cent of the government’s general annual procurement through the year. While the annual procurement continued to scale north, the year-on-year development price contracted in FY21 to 1.08 per cent from FY20 in comparison to 3.85 per cent development price for FY19-20 and 3.21 per cent for FY18-19, according to the information from MSME Sambandh.
Moreover, the worth of goods procured from MSEs also declined to Rs 36,482 crore in FY21 from Rs 39,632 crore in FY20, and Rs 40,399 crore in FY19. The quantity of MSEs benefitting from annual procurement was also decreased to 1.48 lakh in FY21 from 1.57 lakh in FY20 even as it was greater than 1.28 lakh MSE benefitting from public procurement in FY19. “Covid had a significant impact on businesses of MSMEs over the past year. As per estimates, one-third of MSMEs in India has taken a hit due to the pandemic that is reflected in the procurement growth rate as well,” Sanjiv Layek, Executive Secretary, World Association For Small And Medium Enterprises (WASME) told TheSpuzz Online.
Email sent to Government eMarketplace (GeM) CEO Talleen Kumar didn’t elicit an instant reply for this story. GeM is the government’s public procurement portal to allow ease of obtaining and promoting amongst government purchasers and MSME sellers.
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While procurement from MSEs by the central ministries, departments, and CPSEs remained above the threshold mark, the purchases from SC/ST and ladies-led MSEs have continued to fall considerably brief of meeting the annual targets. The government had earmarked 25 per cent yearly procurement target by MSEs for CPSEs from April 1, 2015, onwards up from 20 per cent earlier, according to the MSME Ministry’s web-site. A sub-target of 4 per cent from SC/ST owned MSEs and 3 per cent from ladies-owned MSEs have been earmarked out of the 25 per cent target. FY21 procurement worth Rs 669.44 crore from 5,429 SC/ST MSEs stood at .57 per cent and Rs 639.15 crore procurement from 4,129 ladies MSEs was only .55 per cent.
“Women and SC/ST entrepreneurs’ participation has been very low in government schemes as they are not encouraged towards the same. Encouragement from the government end also has been lacking along with lack in promotional activities. This requires door-to-door reaching out to SC/ST and women MSEs to enhance their participation and boost procurement. Also, many of them are not aware of public procurement and other schemes,” added Layek.
Importantly, although the public procurement from MSEs has improved annually, the government is not conscious of substantial firms setting up wholly-owned MSE subsidiaries to obtain public procurement tenders in the nation, according to MSME Minister Nitin Gadkari. “No, sir,” Gadkari had replied to a query in the Rajya Sabha on no matter if the government is conscious that some substantial corporates are setting up wholly-owned MSEs subsidiaries to grab public procurement tender.