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Procurement policy for MSMEs in limbo

The public procurement policy for the MSME sector, which would have made it mandatory for all ministries and public sector undertakings to procure 20% of their total annual purchase volume from the MSMEs, has been delayed due to a spanner thrown in the works by the ministry of social justice and empowerment. Debobrat Ghose reports.
Hindustan Times | By Debobrat Ghose, New Delhi
UPDATED ON MAR 02, 2011 08:57 PM IST

The public procurement policy for the MSME sector, which would have made it mandatory for all ministries and public sector undertakings to procure 20% of their total annual purchase volume from the MSMEs, has been delayed due to a spanner thrown in the works by the ministry of social justice and empowerment .

"The ministry has demanded 20% reservation for SC & ST category against the proposed 10%, which has delayed the process," a ministry source said.

Initially, lower procurement targets will be fixed, which will be taken to 20% over a period of three years.

The MSME's share of estimated annual procurements, worth over Rs 1.7 lakh crore, is now a mere 5% (Rs 8,500 crore).

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