Lok Sabha Question No. 2049 (UNSTARRED), answered on 2016-11-28
Subject: Public Procurement Policy
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Shrirang Appa Barne, DHARMENDRA YADAV, ANANDRAO  ADSUL, PRITAM GOPINATH MUNDE, SHIVAJI ADHALRAO PATIL, VINAYAK BHAURAO RAUT, SHRIKANT EKNATH SHINDE

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION  No. 2049 TO BE ANSWERED ON 28.11.2016

## PUBLIC PROCUREMENT POLICY

2049.      SHRI  SHRIRANG  APPA  BARNE : SHRI  DHARMENDRA  YADAV : SHRI  ANANDRAO  ADSUL : DR.  PRITAM  GOPINATH MUNDE : SHRI  ADHALRAO  PATIL SHIVAJIRAO : SHRI  VINAYAK  BHAURAO  RAUT : DR. SHRIKANT  EKNATH  SHINDE :

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state :

- (a) whether  the  Government  has  made  the  Public  Procurement  Policy  of  Micro,  Small and Medium Enterprises (MSMEs) mandatory for Central Ministries/Departments /CPSUs;
- (b) if  so,  the  extent  to  which  the  aforesaid  policy  is  being  followed  by  various  such agencies since its notification;
- (c) whether majority of state-owned firms are reportedly not meeting the norms of 20 per cent procurement from MSMEs, if so, the details thereof and the reasons thereof;
- (d) whether the Government has called for a strong co-ordination mechanism between the Ministry of MSME and other stakeholders, if so, the details thereof along with the steps taken by the Government to ensure proper implementation of the said policy; and
- (e) whether the Government also proposes to make it mandatory for central  Ministries and  PSUs  to  earmark  a  portion  of  their  procurement  of  goods  and  services  from  women entrepreneurs, if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI HARIBHAI PARATHIBHAI CHAUDHARY)

- (a):    Yes, Madam. The Government of India  has  notified Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012  under which a minimum of  20% of the total  annual  procurement  is  made  mandatory  from  Micro  &  Small  Enterprises  by  Central Ministries  /Departments/PSUs.  w.e.f.    1st  April    2015.    Out  of  this  20%  target  of  annual procurement  from  MSEs,  a  sub-target  of  4%    has  been  earmarked  for  procurement  from MSEs owned by SC/ST entrepreneurs.

: 2 :

- (b):     The  mandatory provisions of the Policy are being followed by agencies  which are detailed below:-
1. Tender set free of cost
2. Exemption from the payment of Earnest Money
3. In  tender,  participating  MSEs  quoting  price  within  price  band  of  L1+15% shall also be allowed to supply a portion of requirement by bringing down their price to L1 price in a situation where L1 price is from someone other than a MSE and such MSE shall be allowed to supply at least 20% of the total tendered value.
4. 358 items reserved for exclusive procurement from MSEs.
- (c): The PP Policy is applicable to only Central Ministries /Departments /PSUs and State owned firms follows respective State Procurement Policy.
- (d): A Review Committee headed by Secretary, MSME has been constituted to    monitor and review the Policy including  coordination between the Ministry and various stakeholders. The meetings of the Review Committee are held on regular basis for monitoring the progress made in implementation of the Policy.
- (e): At present, no such proposal is under consideration of this Ministry.

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