Ease of doing business for MSMEs: The MSME Ministry is looking to expand the scope of public procurement for micro and small enterprises (MSEs) by adding multiple services and increasing the number of goods to the existing list of 358 items reserved for purchase from MSEs exclusively. The Development Commissioner (DC) MSME office in a communication issued said the Internal Technical Committee of the MSME Ministry has prepared a revised list of 469 items (including goods and services), to be reserved for exclusive procurement from MSEs.
“The existing list required a relook to find out the relevance in the present-day context of technological change, growth of small and medium enterprises. Various stakeholders had recommended that services be also included in the list,” the note signed by Nitisha Mann, Deputy Director, Public Procurement Policy, Office of DC MSME on October 27 read. The DC office has invited suggestions to the draft list before the end of November. Currently, only goods are part of the exclusive procurement list.
“Public procurement policy’s benefits apply equally to both manufacturing and services and based on Udyam registration data, the majority of MSMEs are services based. Given that MSMEs are adopting technology for growth and are capable of serving more customers, it makes sense for the government to include services in the list. By doing this, it would give assured market to service MSMEs as well,” a source aware of the development told FE Aspire seeking anonymity.
For the uninitiated, the central government ministries, departments and central public sector enterprises (CPSEs) are mandated to procure 25 per cent of their annual value of goods or services from MSEs. The exclusive items to be procured from MSMEs help in their promotion and growth and play a critical role in fostering inclusive growth in the country, the communication read.
The additional 111 items added to the revised list included 16 services such as architectural and engineering consultancy, operation of canteens, housekeeping services, tailoring, tour operator services, waste collection services, interior decorator services, renting and leasing of motor vehicles, furniture and home furnishing repair, hiring of taxies/school buses and buses for the transport of employees, etc. The goods category included agricultural tools, bags, sanitary ware, paints, paper, shoes, cotton and cotton products, coir products, pipes, chemicals, electric devices, dyes, rubber products, wax items, handicraft items, etc.
“The committee will look into the suggestions received and will roll out the final list very soon but there is no deadline to it,” the source said.
Public procurement from MSEs in the first half of the financial year 2022-23 increased by 59.5 per cent from the year-ago period, showed government data. As of October 14 in the last fiscal, the procurement value stood at Rs 13,325 crore in comparison to Rs 21,256 crore as of October 9 in the current financial year, FE Aspire had reported based on 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.