Odisha MSMEs stare at losses with online purchase

BHUBANESWAR: Hit by months-long Covid-19 lockdown, the micro, small and medium enterprises (MSMEs) of the State are now staring at huge losses and set to lose out on big players with the State government mandating procurement through government e-marketplace (GeM).   

At a time when the Centre is encouraging ‘vocal for local’ to promote local products, the MSME entrepreneurs feared that the recent move of the government will lead to closure of many units that are finding it difficult to compete with big traders and entrepreneurs already registered with the GeM.

To help MSMEs market their products, the government had earlier set up the Directorate of Export Promotion and Marketing, which was entrusted with registration of manufacturing units and formulating a process of procurement through ‘rate contract system’. Since then, a transparent procurement system had been followed for purchase of goods.

“While there are a lot of technical glitches in the GeM portal which creates problem for MSMEs to get registered, many will be deprived of facilities extended to manufacturers as it facilitates mostly big traders,” pointed out Satwik Swain, secretary general of Odisha Assembly of Small and Medium Enterprises (OASME).

Protesting the move, several MSME associations have demanded the government to create Odisha specific portal so that only buyers and sellers of the State can be registered and do business. 

“Procurement through GeM has several grey areas which can lead to quality compromise as it does not have any mandatory provision for pre and post-delivery inspection,” observed Smarajit Mohanty, president of Orissa Small Scale Industries Association. 

Every year, at least 88 products are procured from MSME units for a value of around `300 crore. The entrepreneurs have threatened to launch an agitation if the government fails to reverse its decision.