Ease of doing business for MSMEs: Purchase of goods by government enterprises from micro and small enterprises has hit an all-time high in the financial year 2022-23. According to the official data, procurement worth Rs 58,429 crore was made by central public sector enterprises (CPSEs) from 2.16 lakh MSEs during FY23, growing by 9.3 per cent from Rs 53,423 crore worth purchases made from 2.25 lakh MSEs in FY22.
It is mandatory for central ministries or enterprises as per the Public Procurement Policy for MSEs, Order 2012 to procure a minimum 25 per cent share out of their total annual procurement from MSEs.
Data from the public procurement policy monitoring portal MSME Sambandh showed that CPSEs purchase from MSEs has remained above the mandated 25 per cent since FY19. It scaled to 34.8 per cent in FY23 out of total public procurement of Rs 1.67 lakh crore from 32 per cent in FY22 out of Rs 1.64 lakh crore in total procurement. In FY21 and FY20, the share stood at 29 per cent and 26 per cent in FY19.
Within 25 per cent, sub-targets of 4 per cent and 3 per cent have been earmarked for procurement from MSEs owned by SC/ST entrepreneurs and women entrepreneurs respectively.
The procurement by two sub-categories of MSEs was also at an all-time high in FY23. CPSEs purchased goods worth Rs 1,312 crore from SC/ST MSEs in FY23, contributing 0.78 per cent to overall MSE purchases. In comparison, the FY22 procurement stood at Rs 1,290 crore from SC/ST MSEs, albeit having the same share of 0.78 per cent in total MSE purchases during the year.
With respect to procurement from women MSEs, FY23 purchases grew to Rs 1,808 crore with a 1.08 per cent share in total MSE procurement from Rs 1,660 crore worth purchases with a 1.01 per cent share.
Among the top buyers of MSE goods including the petroleum and natural gas ministry which made purchases worth Rs 23,706 crore in FY23 followed by the defence ministry procuring goods worth Rs 6,804 crore from MSEs. Others on the list were the power ministry with Rs 5,809 crore worth purchases, the steel ministry buying goods worth Rs 5,308 crore, the coal ministry with procurement worth Rs 4,120 crore, and more, according to the data from the Sambandh portal.
In order to boost procurement from small businesses, the MSME ministry in October last year had prepared a revised list of 469 items (including goods and services) to be reserved for exclusive procurement from MSEs. The list had added multiple services to the existing list of 358 items which only contained goods for exclusive procurement.
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