Lok Sabha Question No. 3553 (UNSTARRED), answered on 2021-03-17
Subject: Scheme for promotion of MSMEs
Ministry: DEFENCE
Asked by: Parvesh Sahib Singh

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF DEFENCE PRODUCTION

## LOK SABHA UNSTARRED QUESTION NO.3553

TO BE ANSWERED ON 17 th  March, 2021

## SCHEME FOR PROMOTION OF MSMEs

## 3553. SHRI PARVESH SAHIB SINGH VERMA:

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) the details of events and initiatives under the Scheme For Promotion of MSMEs in Defence sector in the last two years;
- (b) the details of procurement from MSMEs by the Ministry in the last two years;
- (c) the details of measures taken by the Ministry to train and upgrade skills of MSME workers during COVID 19 pandemic;
- (d)  the  total  procurement  from  MSMEs  done  after  the  embargo  on  101  items  have  been introduced last year; and
- (e) if so, the details thereof and if not, the reasons therefor?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI SHRIPAD NAIK)

- (a)  to (e) :  A statement is attached.

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## STATEMENT REFERRED TO IN THE REPLY TO PARTS (a) TO (e) OF LOK SABHA UNSTARRED  QUESTION  NO.  3553  FOR  ANSWER  ON  17.03.2021  REGARDING 'SCHEME FOR PROMOTION OF MSMEs'

(a) Following measures have been taken for promotion of Micro, Small and Medium Enterprises (MSMEs) in defence production sector:-

1.  Cases  with  Acceptance  of  Necessity  (AoN)  cost < Rs  100  Crores  are  reserved  for MSMEs, provided there are at least two or more MSMEs eligible to participate in the category.
2.  In order to encourage startups/MSMEs, procurement cases where the estimated cost is not exceeding Rs 100 crores/year based on delivery schedule at the time of seeking AoN or Rs 150 crores, whichever is higher, may be considered for issue of RFP without any stipulation of Financial parameters.
3. Project under the Make categories, with procurement not exceeding Rs 100 crores/year based on delivery schedule at the time of seeking AoN are earmarked for MSMEs.
4. Offset Policy has been revised in the year 2020, to provide a multiplier of 1.5 where Indian Offset Partner (IOP) is a MSME.
5.  Department  of  Defence  Production  (DDP)  regularly  conducts  outreach  programs  in various  parts  of  the  country  to  interact  with  industry  associations,  industry  especially MSMEs and academia, to spread awareness about the potential export opportunities.  A scheme aimed to promote MSMEs in Defence has been accorded approval.  Under this scheme, conclaves/seminars are organized in Tier II and Tier III cities across the country with strong industrial and MSME presence, with the support of DDP.  Three state level conclaves and one national level conclave in form of webinar have been organized during last two years under the scheme.
6.  An  innovation  ecosystem  for  Defence  titled  Innovations  for  Defence  Excellence (iDEX) has been launched in April, 2018.  iDEX is aimed at creation of an ecosystem to foster  innovation  and  technology  development  in  Defence  and  Aerospace  by  engaging Industries  including  MSMEs,  Start-ups,  Individual  Innovators,  R&D  institutes  and Academia and provide them grants/funding and other support to carry out R&D which has potential for future adoption for Indian defence and aerospace needs.
7.  An  indigenization  portal  namely  SRIJAN  has  been  launched  in  August,  2020  for Defence Public Sector Undertakings (DPSUs)/Ordnance Factory Board (OFB)/Services with an industry interface to provide development support to MSMEs/Startups/Industry for import substitution.

8.      Government  has  established  two  Defence  Industrial  Corridors,  one  each  in  Uttar Pradesh and Tamil Nadu to serve as an engine of economic development and growth of Indian defence industry including MSMEs.
9.  Ministry of MSMEs implement various schemes and programmes for promotion and development  of  MSMEs  including  defence  sector  MSMEs  across  the  country.    These include  Prime  Minister's  Employment  Generation  Programme  (PMEGP),  Scheme  of fund for Regeneration of Traditional  Industries (SFURTI), A scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE), Credit Guarantee scheme, Credit  Linked  Capital  Subsidy  and  Technology  Upgradation  Scheme  (CLCSSTUS), Technology  Centre  Systems  Programme  (TCSP),  Micro  and  Small  Enterprises-Cluster Development Programme (MSE-CDP), Procurement and Marketing Support Scheme etc. Ministry  also  reviews  and  monitors  the  progress  of  the  implementation  of  the  Public Procurement Policy for MSEs Order, 2012.
3. (b) to (e):  As per information provided by Ministry of MSMEs, the details of procurement in terms of value from MSEs in Defence Sector by the Defence Department/CPSEs in the last two years and current year are as under:-

| Financial Year             |   Total Procurement (Rs in Crores) |
|----------------------------|------------------------------------|
| 2018-19                    |                           12112    |
| 2019-20                    |                            9090.62 |
| 2020-21 (As on 11.03.2021) |                            9293.81 |

Further  regular  Vendor  development  programmes  and  webinars  are  organized  for MSMEs by OFB and DPSUs for development of supply chain.  However, during the COVID-19 pandemic, many webinars were conducted due to COVID-19  restrictions on physical accumulation.

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