Public procurement: Modi govt’s purchases from women-owned small businesses hit record level in FY21

By: |
March 04, 2021 7:32 PM

Ease of Doing Business for MSMEs: The share of women-owned micro and small enterprises in the government's overall purchases from MSEs stood at 0.15 per cent in FY19 and 0.32 per cent in FY20.

Standup India has onboarded over 300 lenders with over 1.5 lakh branches connected to the scheme. Image: IE (Representative image)

Ease of Doing Business for MSMEs: Central ministries, departments, and central public sector enterprises have made the highest procurement from women-owned micro and small enterprises (MSEs) in FY21 since the launch of the public procurement policy monitoring platform MSME Sambandh in December 2017 by the government. According to the data sourced from MSME Sambandh, the government has already purchased goods and services worth Rs 556.82 crore from 3,586 women-owned MSEs as of March 4, 2021, in the current financial year vis-à-vis Rs 393.43 crore worth procurement in FY20 from 3,655 women MSEs. The procurement for FY19 stood at Rs 232.56 crore from 1,410 women MSEs while during the four months of FY18 (December 2017 – March 2018), zero procurement was made from women MSEs.

FY21 procurement so far was 1.4X of FY20 procurement and 2.4X of goods purchased from women MSEs in FY19. The annual procurement target for government buyers from MSEs was revised in 2018 to 25 per cent from earlier 20 per cent of their total annual purchases. The 25 per cent procurement included a 4 per cent target from MSEs owned by SC/ST entrepreneurs and a 3 per cent target from women-owned MSEs.

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However, the buyers have been unable to meet the annual procurement target from SC/ST and women entrepreneurs even as the overall goal of 25 per cent was accomplished with 26.32 per cent procurement from MSEs in FY19 and 31.69 per cent procurement in FY20. In contrast, procurement share of SC/ST entrepreneurs stood at only 0.54 per cent and 0.56 per cent for FY19 and FY20 respectively. The procurement during the two FYs from SC/ST entrepreneurs was worth Rs 824.71 crore from 4,587 MSEs and Rs 692.76 crore from 6,330 MSEs. Likewise, the share of women-owned MSEs stood at 0.15 per cent in FY19 and 0.32 per cent in FY20.

Among 54 ministries listed on the MSME Sambandh portal, the highest procurement from MSEs in FY21 so far has been made by the Ministry of Petroleum and Natural Gas worth Rs 14,452 crore followed by the Ministry of Power with MSE procurement worth Rs 3891 crore, Ministry of Defence worth Rs 2,769 crore, Ministry of Heavy Industries and Public Enterprises worth Rs 2,227 crore, Ministry of Steel worth Rs 1,915 crore, etc.

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