BHELSIA evaluates cluster-based approach to increase utility of Defence Acquisition Procedure (DAP) 2020

Ease of Doing Business for MSMEs: BHELSIA opines that consideration of clusters as units has the potential to meet the turnover eligibility of the MSME sector in order to cater to the defence sector.

BHEL, vande bharat trains, order, regulatory filing, taxes, duties, supply
A consortium led by BHEL has bagged an order worth more than Rs 9,600 crore to supply 80 sleeper class Vande Bharat trains to Indian Railways over a period of six years.

Ease of Doing Business for MSMEs: BHEL Small and Medium Industries Association (Bhelsia), the association established by Bharat Heavy Electricals Limited (BHEL) vendors and suppliers, is evaluating cluster-based approach to increase the utility of MSME-friendly Defence Acquisition Procedure (DAP) 2020 and help revive sick MSME units as per a report by The Hindu. 

In line with Atmanirbhar Bharat initiative, DAP enables the procurement and acquisition of upgraded technology, products and services for the Tri-Services and other allied defence services. 

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Under the economic support package for MSMEs, the union government doesn’t allow global tenders to bid for government procurement up to Rs 200 crore. 

The industry association opines that consideration of clusters as units has the potential to meet the turnover eligibility of the MSME sector in order to cater to the Defence sector. 

Appealing to the Central and state governments to renew life into the sick MSMEs, Rajappa Rajkumar, President, BHELSIA said,  “There are strong signs of revival of MSME sector in Tiruchi region. The progress could be leveraged further by securing orders from Defence equipment manufacturers on a cluster basis,” BHELSIA. 

Till date, 35 units have been categorised as sick out of which 25 have the potential to  be rekindled if the Tamil Nadu government serves the intended purpose in the upcoming meeting of State Level Bankers Committee, said Rajkumar. 

He also highlighted that the struggling MSME units who have already created capacity and expertise can have higher utility as compared to newly incorporated units. He underlined the fact that BHEL’s ancillary units had a high degree of capability for catering to the defence sector. 

The Department of Defence Production, Ministry of Defence is running the DAP scheme for promotion of MSMEs, under the Make in India initiative of the Central Government with the aim to bring the sector into the defence supply chain and promote self-reliance in the country in defence.

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The Department provides related information through workshops and conclaves to MSMEs from non-defence sectors who want to foray in the defence sector, under the scheme. Moreover, MSME vendors can also access information regarding the opportunities in the Defence Procurement Procedure, especially the Make II procedure before linkage with Original Equipment Manufacturers, and Defence Public Sector Undertakings.

According to data from Defense Ministry, procurement by DPSUs (Defence Public Sector Undertakings) from MSMEs stood at Rs 5,463 crore during 2020-21, the report mentioned. 

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First published on: 26-12-2022 at 18:55 IST
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