Govt kicks off FY22 procurement from MSEs with purchases over 25% of its annual target

Central public sector enterprises (CPSEs) across ministries have kicked off FY22 procurement of goods from micro and small enterprises (MSEs) with a cumulative 27.65 per cent share (for April, May, and the first week of June) in their overall purchase. The annual procurement target for government buyers from MSEs is 25 per cent of their total purchase. The targetted procurement included a 4 per cent target from MSEs owned by SC/ST entrepreneurs and a 3 per cent target from women-owned MSEs. According to the data from the MSME Ministry’s public procurement policy monitoring portal MSME Sambandh, 35 CPSEs have made procurement worth Rs 2,884 crore as of June 6, 2021, of which Rs 797.65 crore (27.65 per cent) worth procurement was made from 2,052 MSEs. The share of FY21 and FY20 procurement from MSEs was 31 per cent and 30 per cent respectively.

Ministries with the highest procurement from MSEs, irrespective of their overall annual target, were Ministry of Petroleum and Natural Gas (Rs 382 crore), Ministry of Power (Rs 148 crore), Ministry of Mines (Rs 78 crore), Ministry of Heavy Industries and Public Enterprises (Rs 77 crore), and Ministry of Steel (Rs 65 crore), etc., the data showed. Procurement from SC/ST MSEs was worth Rs 27.95 crore (0.97 per cent of targeted 4 per cent) from 45 enterprises and Rs 65.56 crore (2.27 per cent of targeted 3 per cent) from 113 women-owned MSEs, so far. In fact, FY18 onwards data from the monitoring portal showed that procurement from SCT/ST and women MSEs have remained below their targets so far.

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Importantly, FY21 procurement from MSEs had witnessed a marginal decline for the second consecutive year to Rs 39,538 crore from Rs 39,632 crore in FY20 and Rs 40,399 crore in FY19, Financial Express Online had reported last month. Despite that, the procurement since the past three financial years (FY19-21) has been over 25 per cent annual target — 26 per cent for FY19, 30 per cent for FY20, and 32 per cent for FY21.

The government had last month announced a dedicated portal, effective July 1, 2021, for sellers to file grievances for alleged violation of the Public Procurement (Preference to Make in India) Order, 2017. The portal by the Department for Promotion of Industry and Internal Trade (DPIIT) will refer grievances of suppliers and bidders to concerned procuring entities including ministries and departments “on real-time basis for examination, necessary corrective action and comments, if any,” DPIIT had said in an office memorandum.