Lok Sabha Question No. 3078 (UNSTARRED), answered on 2025-08-07
Subject: Public Procurement from MSMEs
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri S Venkatesan

3078.

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

## LOK SABHA UNSTARRED QUESTION NO. 3078 TO BE ANSWERED ON 07.08.2025

## PUBLIC PROCUREMENT FROM MSMEs

SHRI  S VENKATESAN:

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

- (a) the  norms  prescribed  for  Public  Procurement  by  Ministries/Departments/PSUs from MSMEs particularly from SC, ST and women entrepreneurs;
- (b) the  details  of  Public  Procurement  made  by  Ministries/Departments/PSUs  from  MSMEs particularly SC, ST and women entrepreneurs during the last two financial years 2023-24 and 2024-25;
- (c) whether  the  action  has  been  initiated  against  Officials  responsible  for  non-adherence  in fulfilling the norms applicable to Public Procurement from MSMEs including those led by SC, ST and women entrepreneurs, if so, the details thereof;
- (d) the  details  of  Ministries/Departments/PSUs  not  fulfilling  the  norms  for  Public  Procurement from MSMEs particularly SC, ST and women entrepreneurs; and
- (e) the mechanism to ensure adherence to norms for the Government procurement?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

- (a): The  Ministry  of  MSME  vide Gazette  Notification  No.  S.O.  581(E), dated  23 rd March,  2012 notified  the  Public  Procurement  Policy  for  Micro  and  Small  Enterprises  (MSEs),  Order,  2012.  The Policy (amended in 2018) mandates 25% annual procurement from MSEs by Central Ministries/Departments/Central Public Sector Enterprises (CPSEs), including 4% from MSEs owned by  SC/ST  and  3%  from  MSEs  owned  by  women  entrepreneurs.  As  per  the  Policy,  MSEs  must  be provided tender sets free of cost and they are exempted from payment of Earnest Money Deposit.
- (b): The details of procurement made from MSEs during the last two financial years, 2023-24 and 2024-25, as per MSME Sambandh Portal, by CPSEs, are attached as Annexure-I .
- (c) to (e): All  possible  efforts  are  being  taken  by  the  Ministry  in  coordination  with  CPSEs,  to adhere to the norms applicable for Public Procurement from MSEs.

As per MSME Sambandh Portal, there were 117 CPSEs, in case of which, the sub-target of Procurement  from  SC/ST  and  women  entrepreneurs  for  F.Y.  2024-25  was  less  than  the  target mandated.

The Ministry of MSME constantly monitors the progress under Public Procurement Policy and following steps have been taken to ensure achievement of targets and sub-targets under the Policy:

-  MSME  Sambandh  Portal  was  launched  in  2017  by  the  Ministry  of  MSME  for  real-time monitoring  of  targets  under  the  Policy.  A  database  of  MSE  vendors  along-with  their  social category, for all major product categories and services is available (with open access) for the procuring entities on MSME Sambandh Portal.
-  Udyam  Registration  Portal  (URP)  has  a  facility  through  which  an  entrepreneur  can  opt  for linking  itself  with  Government  e-market  (GeM)  place  by  selecting  an  option  on  URP.  The enterprise  is  linked  to  GeM  Portal  with  this  facility,  MSEs  can  link  themselves  with  the Government's  procurement  system  and  participate  in  Government's  mandatory  procurement programme from MSEs. Follow up with GeM for supporting SC/ ST and Women entrepreneurs is done on a regular basis.
-  Under  the  Procurement  and  Marketing  Support  Scheme  of  the  Ministry  of  MSME,  Vendor Development  Programmes  are  organised  for  creating  awareness  among  enterprises.  Special Vendor Development Programmes/ Buyer-Seller Meets are being conducted by Departments and CPSUs for SC/STs and Women owned enterprises.
-  Under  MoU framework on performance evaluation of CPSEs,  DPE introduced  compliance parameter on procurement of goods and services through MSEs from FY 2021-22 onwards and failure  to  achieve  the  targets  (From  MSEs)   and  sub-targets  (From women-owned  MSEs and SC/ST  owned  MSEs)  leads  to  negative  marking  while  calculating  the  marks  for  the  annual performance of CPSEs.

In last two years, procurement from MSEs owned by SC/ST entrepreneurs increased by nearly two  times  and  reached  Rs.  3,584.55  crore  in  FY  2024-25  and  procurement  from  MSEs  owned  by women entrepreneurs, with an increase of around two times, reached Rs. 5,972.20  crore in FY 202425.

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## Annexure-I

Year wise annual procurement from MSEs by CPSEs in the last two years

| F. Years                   | Total Procurement (Rs. in Crores)   | Procurement from MSEs (Rs. in Crores)               | Procurement from MSEs owned by SC/ST (Rs. in Crores)   | Procurement from MSEs owned by Women (Rs. in Crores)   |
|----------------------------|-------------------------------------|-----------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------|
| 2023-24                    | 1,70,985.77                         | 74,727.05 (43.70%) (No. of MSEs Benefited-2,58,449  | 1,761.78 (1.03%) (No. of MSEs Benefited-11,571         | 3,154.98 (1.85%) (No. of MSEs Benefited-21,340         |
| 2024-25 ( As on 05.08.2025 | 2,69,860.17                         | 94,571.73 (35.04%) (No. of MSEs Benefited-2,94,572) | 3,584.55 (1.33 %) (No. of MSEs Benefited-21,483)       | 5,972.20 (2.21%) (No. of MSEs Benefited-33,971)        |

Source: MSME SAMBANDH Portal