Designing preference policies related to procurement of goods and services, produced and provided by the micro small and medium enterprises (MSMEs) could address issues such as lack of structured markets, low demand, delayed payments, cost of capital, obsolete technology and lack of skilled manpower which have become a cause for concern for the growth of the sector.
The Confederation of Indian Industry (CII), in a report said that the criteria for eligibility for procurement by government departments and agencies is significantly stringent and acts as a deterrent to many MSMEs to put in their bids.
It has also said that there is need to ensure that "MSMEs have appropriate opportunities to compete for business, considering as appropriate in the context of value for money."
CII said that many other economies have already formulated such policies to enable these enterprises to remain competitive even in adverse economic conditions.
According to the study, the UK has proposed to award 25% of public contracts to the SMEs along with the transparency agenda with a specified limit for government spending which is also published online.