Public procurement: Govt buys 60% more from small businesses in H1 FY23 from year-ago period | The Financial Express

Public procurement: Govt buys 60% more from small businesses in H1 FY23 from year-ago period

Ease of doing business for MSMEs: The government has earmarked a minimum 25 per cent threshold for various ministries and departments in their annual procurement from MSEs from April 1, 2015, onwards up from 20 per cent earlier.

Public procurement: Govt buys 60% more from small businesses in H1 FY23 from year-ago period
The share of MSE procurement by CPSEs out of their overall purchase of various goods and services also increased from 30.15 per cent during the first half of FY22 to 32.94 in the first half of the current FY.

Ease of doing business for MSMEs: The value of goods procured by the central public sector enterprises (CPSEs) from micro and small enterprises (MSEs) in the first half of the financial year 2022-23 has increased by 59.5 per cent from the year-ago period, showed government data. The total amount of public procurement by CPSEs as of October 14 FY22 stood at Rs 13,325 crore in comparison to Rs 21,256 crore as of October 9 in the current financial year.

According to the data from the MSME Sambandh portal, the procurement was made from 75,120 MSEs this FY, up 11.7 per cent from 67,224 MSEs during the year-ago period. The share of MSE procurement by CPSEs out of their overall purchase of various goods and services also increased from 30.15 per cent during the first half of FY22 to 32.94 in the first half of the current FY. The overall purchase by CPSEs amounted to Rs 64,527 crore during H1 FY23 compared to Rs 44,198 crore during H1 FY22. 

The government has earmarked a minimum 25 per cent threshold for various ministries and departments in their annual procurement from MSEs from April 1, 2015, onwards up from 20 per cent earlier. Notably, the procurement level has remained above 25 per cent in the past years. However, the government is not keen on increasing the minimum threshold from 25 per cent. 

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“We are not looking to enhance it right now but focusing on increasing the public procurement from women entrepreneurs and SC/ST entrepreneurs. So, we are working on it,” Ishita Ganguli Tripathy, Additional Development Commissioner, MSME Ministry told FE Aspire on the sidelines of the SME Artha event in September organised by FE Aspire.

The 25 per cent minimum procurement limit includes a sub-target of 3 per cent from women entrepreneurs and 4 per cent from SC/ST entrepreneurs. However, CPSEs have been unable to meet the targets in the two categories. During FY22, 0.77 per cent of procurement amounting to Rs 1,261 crore was made from SC/ST units and 1 per cent worth Rs 1,630 crore from women-led enterprises. In H1 FY23, 0.74 per cent procurement has been made amounting to Rs 480 crore from 2,877 SC/ST units while 0.81 per cent purchase amounting to Rs 521 crore from 2,984 women MSEs, data showed.

Also read: Rajasthan has over 6 lakh MSMEs employing more than 37 lakh people: state govt

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First published on: 09-10-2022 at 15:18 IST