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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.

business Updated: Mar 02, 2011 20:57 IST
Debobrat Ghose
Debobrat Ghose
Hindustan Times
Hindustantimes

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).