Ease of Doing Business for MSMEs: If there is one scheme for little firms exactly where the government has possibly constantly overachieved its target in the previous handful of years, it is public procurement policy. The official information due to the fact FY19 showed that central ministries’ procurement share from micro and little enterprises (MSEs) was 26 per cent followed by 30 per cent in FY20, and 28 per cent in FY21 when it also continued to keep above the 25-per cent mark in the present economic year so far. The government had earmarked a 25 per cent target for many ministries and departments in their annual procurement from MSEs from April 1, 2015, onward up from 20 per cent earlier.
While majority of the 54 ministries/departments — listed on the MSME Ministry’s public procurement policy monitoring portal MSME Sambandh — have currently made considerable quantity of purchases from MSEs throughout the 1st two quarters of FY22, a handful of them have been outliers in terms of their procurement share.
A total of 5 ministries/departments like Ministry of Agriculture & Farmers’ Welfare, Ministry of Housing and Urban Affairs, Ministry of Ports, Shipping and Waterways, Ministry of Textiles, and Department of Atomic Energy have currently crossed the 25 per cent procurement threshold based on their present purchases, the information showed.
“There has been a significant procurement by these ministries from MSEs. I think the target is low as a lot more potential is there for buying from MSEs while the procurement level will only go up from here. The government’s focus has been on MSEs in the MSME segment through this scheme. Ministries like textiles and agriculture would have significant impact on MSEs. Even for the space sector, niche small players are playing a major role which is a good sign. There has been a substantial increase (in transactions) across these categories on our portal as well,” Prashant Kumar Singh, CEO, Government e-Marketplace (GeM) told TheSpuzz Online. The GeM portal presently has almost 30 lakh sellers like 7.26 lakh MSEs that have an order worth share of 56.48 per cent.
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While purchases for agriculture ministry has currently crossed Rs 18.38 crore – 25 per cent of Rs 73.50 crore annual obtain target – to Rs 19 crore, housing and urban affairs ministry has so far purchased goods worth Rs 1.73 crore vis-a-vis Rs 69 lakh target of their general aim of Rs 2.74 crore. Likewise, textiles ministry bought goods worth Rs 17.35 crore against their Rs 15.08 crore target. The most significant jump in terms of sheer value (quantity spent) of purchases was recorded by the Department of Atomic Energy. It procured goods worth Rs 428.75 from MSEs in comparison to Rs 346.80 crore target based on their general obtain target of Rs 1,387 crore presently. On the other hand, ports and shipping ministry overachieved its target by a fairly thinner worth. Its purchases stood at Rs 293.60 crore against Rs 293.35 crore target.
“Small businesses have also been engaging with other ministries. For instance, in freight forwarding, most businesses are MSMEs providing goods to not just private entities but also the government. In our case, we had supplied PPE kits and other Covid-related items, which were imported from different countries, to health ministry. So that way we are connected with the government. We would certainly look at enhancing supply of goods to various ministries even though selling to private entities currently have more potential,” PS Atree, Founder and Director at freight forwarding firm PS Atree & Company told TheSpuzz Online.
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However, it is significant to note that a quantity of other ministries or departments have procurement values a great deal larger than these five ministries but these values are nevertheless to hit or cross their respective 25 per cent targets. For instance, Ministry of Petroleum and Natural Gas has currently made procurement from MSEs worth Rs 7,011 crore when its target is Rs 12,811 crore based on present general obtain target. Similarly, goods worth Rs 1,492 crore has been bought by Ministry of Power from MSEs against the target of Rs 2,309 crore when Ministry of Defence has purchased goods worth Rs 1,433 crore from MSEs vis-a-vis Rs 2,620 crore target, amongst handful of other ministries.
The MSME ministry has also made purchases worth Rs 8.76 crore so far when its 25 per cent target stood at Rs 15.35 crore of its total annual procurement target of Rs 61.40 crore presently. In the present economic year, public procurement worth Rs 44,198 crore has been made by the government, of which Rs 13,325 crore (30.15 per cent) worth procurement was made from 67,224 MSEs so far. This incorporated Rs 317 crore goods purchased from 2,315 MSEs owned by scheduled caste and scheduled tribe entrepreneurs when Rs 327 crore worth procurement was made from 2,245 MSEs owned by females entrepreneurs.