A demand for quota within quota has been made for bagging government purchases which run into several crores of rupees.
The Ministry of Micro, Small and Medium Enterprises (MSME) is considering a proposal under which 20 per cent of all government purchases will have to be sourced from the micro and small units.
Now, the Ministry of Social Justice and Empowerment has made a strong demand for earmarking at least half of this for the enterprises run by Scheduled Castes and Scheduled Tribes. " ...I am not against the principles that Scheduled Caste should also have a reservation in it...This is the matter which is decided by the Cabinet," MSME Minister Virbhadra Singh told PTI.
He said in case the demand for quota within quota has to be met then, the reservation limit for government purchases should be increased to at least 25 per cent.
The annual government purchases run into Rs 1,70,000 crore, of which the micro and small units' share is estimated to be not more than 4-5 per cent. The MSME Ministry is working on the proposal on the recommendation of a task force set up by Prime Minister Manmohan Singh which went into the whole gamut of problems faced by the sector. The MSME Minister the proposal has been circulated among different ministries for their feedback.
Virbhadra Singh said he would favour a legislative support for the policy so that it could be enforced. "We would like to bring a legislation for it so that more sanctity is attached to it," he said. Singh said that lack of credit availability remains a main challenge for the MSME sector.
The Small Industries Development Bank of India (SIDBI) has not been able to ensure adequate finance to the sector, which employs 60 million people and contributes eight per cent to the country's Gross Domestic Product. He said that the bank which functions under the Ministry of Finance should be shifted to the administrative control of his ministry.
"SIDBI, which like NABARD is presently under the administrative control of the Finance Ministry, has not had much impact so far, as small scale companies have to go to other sources for finances," he added. He said that while the name 'SIDBI' suggested that the bank was meant to cater to the financial needs of the small industries, but it was not able to meet their requirements in an adequate way.