Amid Vocal for Local, govt buys more from small businesses than required; these ministries are top buyers

Procuring goods from MSEs above the required threshold by the government comes amid increased focus on manufacturing and selling products made in India.

Credit and Finance for MSMEs: Central public sector enterprises (CPSE), central ministries and departments have procured goods and services worth over Rs 13,000 crore out of which procurement from micro and small enterprises (MSE) stood at Rs 4,203 crore in the financial year 2020-21 so far, according to the government data. Annual procurement by public sector enterprises, 25 per cent of which has to be from MSEs as mandated by the government, is already maintaining a healthy rate of 32.22 per cent currently, the data published on the public procurement policy monitoring portal MSME Sambandh showed. The number of MSEs benefitting from the procurement was 11,459. This included 332 SC/ST entrepreneurs-led MSEs that sold goods and services worth Rs 122.68 crore in FY21 so far with a share of 0.94 per cent in the overall procurement from MSEs.

Procuring goods from MSEs above the required threshold by the government comes amid increased focus on manufacturing and selling products made in India instead of using Chinese goods following the Doklam standoff between Indian and Chinese armed forces. The government has been looking to reduce imports from China along with increased scrutiny of every investment coming from Chinese companies into Indian enterprises and small businesses to “curb opportunistic takeovers or acquisitions of Indian companies due to the current Covid-19 pandemic,” a press note issued by the DPIIT in April this year noted. This was followed by the clarion call by PM Modi for ‘Vocal for Local’.

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Importantly, the number of women-led MSEs benefitting under the procurement policy was greater than SC/ST entrepreneurs-led MSEs in the current FY so far. 450 women-owned MSEs benefitted, according to the available data, by selling goods and services worth Rs 95.88 crore to government organizations with a share of 0.73 per cent in the overall procurement. Among the top ministries with the maximum amount of procurement from MSEs in FY21 so far were Ministry of Petroleum and Natural Gas procuring goods worth Rs 1,500 crore followed by Ministry of Power (Rs 989.6 crore), Ministry of Heavy Industries and Public Enterprises (Rs 459.1 crore), Ministry of Defence (Rs 396.3 crore), Ministry of Coal (Rs 308.3 crore), etc.