Ease of doing business for MSMEs: The share of goods bought from micro and small enterprises (MSEs) out of total purchases by the central government in the current fiscal so far has surpassed the share of purchase from MSEs in the entire FY22, indicating a growing focus on procurement from MSEs. Official data showed purchases by the central government including central public sector enterprises (CPSEs), central ministries and departments from MSEs as of March 22 had a share of 34.31 per cent in their total purchase value of Rs 1.55 lakh crore vis-a-vis 32.48 per cent share in FY22 purchases worth Rs 1.64 lakh crore. The share of purchases from MSEs was significantly higher than the mandated 25 per cent annually.
So far goods worth Rs 53,337 crore were procured from 1.92 lakh MSEs in FY23, almost levelling the FY22 procurement value of Rs 53,423 crore from 2.25 lakh MSEs, data from the public procurement monitoring portal MSME Sambandh showed.
Within the 25 per cent annual procurement target, public buyers are required to procure at least 4 per cent from MSEs led by scheduled caste/scheduled tribe entrepreneurs (SC/ST) and 3 per cent from women entrepreneurs. However, government departments so far have been unable to meet those targets.
“Mismatch is primarily the reason for this because CPSEs requirements don’t really match with what women or SC/ST entrepreneurs are making. Then there are quality issues as well while the product range is also very limited. Hence, the percentage hasn’t really gone up to 3 per cent,” Ishita Ganguly Tripathy, Additional Development Commissioner, Office of DC-MSME, Ministry of MSME earlier told FE Aspire. Nonetheless, there has been some improvement.
For instance, the share of purchases from women MSEs improved from only 0.15 per cent in FY19 to 1.01 per cent in FY22 which marginally improved further to 1.03 per cent so far in FY23. Central government purchases from 10,394 women MSEs stood at Rs 1,607 crore in the current fiscal.
“The challenge is both ways – lack of awareness among women entrepreneurs and government has also been not very keen. Either they wouldn’t need the product or women wouldn’t know how to approach or they simply would have no idea about it,” Rajni Agrawal, President, Federation of Indian Women Entrepreneurs told FE Aspire.
Share of procurement from SC-ST MSEs also increased from 0.48 per cent in FY18 to 0.78 per cent in FY22 and 0.83 per cent in FY23 till date amounting to Rs 1,283 crore involving 8,161 units.
Meanwhile, the government had last year announced expanding the scope of public procurement for MSEs by revising the list of 358 items reserved for purchase from MSEs to add services as well to take the total item count to 469 items. The additional 111 items included 16 services such as architectural and engineering consultancy, operation of canteens, housekeeping services, tailoring, tour operator services, waste collection services, interior decorator services, and more.
