The Centre has asked state governments to compulsorily make at least 4% of their purchases from units run by Dalit as well as scheduled caste and scheduled tribe entrepreneurs.
In a letter to all chief ministers last week, Virbhadra Singh, the minister of micro, small and medium enterprises, said that state governments should notify a policy making it mandatory for departments and state-owned firms to source 20% of their purchases from small enterprises. A fifth of that would have to be bought from Dalit and SC/ST-owned firms.
This is in line with a public procurement policy for micro and small enterprises that the Centre had recently notified, setting the quota for purchase of goods from small firms.
The 20% quota for medium and small enterprises for these purchases had become applicable from April 1, 2012, in a three-year staggered manner. It will become mandatory from April 1, 2015.
"I request you to kindly issue instructions to your industries department to interact with all central ministries, departments and public sector undertakings and facilitate the policy implementation," Singh said in his May 23 letter. "I also request you to consider formulating a similar public procurement policy from medium and small enterprises in your state."
The central government spends about a third of its annual budget on procuring products ranging from agricultural implements and cars to stationery items and clothes.
This year, the government is set to spend about Rs. 4 lakh crore on public procurement. Conservative estimates suggest that the reservation policy will provide a ready market of about Rs. 30,000 crore for goods supplied by firms run by Dalits and SC/ST persons. "The policy will be made mandatory from 2015-16. Non-conforming departments will have to provide reasons to the review committee set up under the policy," an official said.