Lok Sabha Question No. 268 (STARRED), answered on 2023-12-21
Subject: Public Procurement Policy for MSMEs
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Mitesh Rameshbhai (Bakabhai) Patel, Durga Das Uikey

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

## LOK  SABHA STARRED QUESTION NO *268 TO BE ANSWERED ON 21.12.2023

## PUBLIC PROCUREMENT POLICY FOR MSMEs

| *268.                                                                                                                                                                                      | SHRI MITESH RAMESHBHAI PATEL (BAKABHAI): SHRIDURGA DAS (D.D.) UIKEY:                                                                                                                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Will the Minister of MICRO, SMALLAND MEDIUM ENTERPRISES be pleased to state: (a) the significance of Public Procurement Policy for Micro and Small Enterprises (MSEs);                     | Will the Minister of MICRO, SMALLAND MEDIUM ENTERPRISES be pleased to state: (a) the significance of Public Procurement Policy for Micro and Small Enterprises (MSEs);                     |
| (b)                                                                                                                                                                                        | the manner in which it impacts procurement from MSEs by Central Ministries/Departments/Central Public Sector Enterprises (CPSEs);                                                          |
| (c)                                                                                                                                                                                        | the details regarding total procurement from MSEs by Central Ministries/Departments/CPSEs;                                                                                                 |
| (d)                                                                                                                                                                                        | whether the Government has taken steps to boost/promote the MSME sector through collaboration/tie-ups with e-Commerce companies;                                                           |
| (e) current                                                                                                                                                                                | if so, the details thereof and the steps taken in this regard during the last three years and the year;                                                                                    |
| (f)                                                                                                                                                                                        | the steps taken by the Government to promote trade in the MSME sector across the country, State/UT-wise;                                                                                   |
| (g) whether the Government has launched any scheme within public procurement to provide relief to MSMEs affected due to Covid-19 pandemic, if so, the details and the outcome thereof; and | (g) whether the Government has launched any scheme within public procurement to provide relief to MSMEs affected due to Covid-19 pandemic, if so, the details and the outcome thereof; and |
| (h) relief?                                                                                                                                                                                | the number of cases in which relief has been provided so far along with the value of such                                                                                                  |
| ANSWER                                                                                                                                                                                     | ANSWER                                                                                                                                                                                     |
| MINISTER OF MICRO, SMALLAND MEDIUM ENTERPRISES (SHRINARAYAN RANE)                                                                                                                          | MINISTER OF MICRO, SMALLAND MEDIUM ENTERPRISES (SHRINARAYAN RANE)                                                                                                                          |

## STATEMENTS REFFERED TO IN REPLY TO PARTS (a) TO (h) OF THE LOK SABHA STARRED QUESTION NO. *268 FOR ANSWER ON 21.12.2023.

(a)  & (b): With  the  objective  of  promoting  the  growth  and  development  of  Micro,  Small  and Medium  Enterprises  (MSME)  by  improving  their  market  access  and  linkages,  Ministry  of  MSME notified  the  Public  Procurement  Policy  for  Micro  and  Small  Enterprises  from  1 st April,  2012,  as amended subsequently. The Policy is mandatory as notified under the MSMED Act 2006. The Policy target  is  an  overall  procurement  of  minimum  25%  of  total  annual  purchases  of  products  produced/ services  rendered  by  Micro  and  Small  Enterprises  (MSE)  by  the  Central  Ministries,  Government Departments and Central Public Sector Undertakings (CPSUs). The Policy has also specified a sub target of 4% procurement of goods and services from MSEs owned by SC/ ST entrepreneurs and 3% from MSEs owned by women entrepreneurs.

Benefits available to the MSEs under the Policy are:

- (i)   Purchase Preference- Minimum 25% annual procurement from MSEs by Central Ministries/ Departments/ CPSUs.
- (ii)   Price match-making facility- If the L1 price by a non-MSE is the lowest, participating MSEs quoting a price within a band of L1+15% will be allowed to bring down their price to match L1 price. Such MSEs are allowed to supply at least 25% of total tendered value.
- (iii) MSEs are to be provided tender sets free of cost, and are exempted from payment of earnest money.
- (iv)  358 items are reserved for procurement from MSEs.

(c): Implementation of Public Procurement Policy for Micro and Small Enterprises is monitored through 'MSME SAMBANDH' portal. As per the portal, during the FY 2023-24, as on 18.12.2023, out of total procurement of Rs. 1,03,139.37 crore reported by 110 CPSUs and one Department, total procurement from MSEs is Rs. 35,671.42 crore (34.59% of total procurement) benefitting 1,23,853 MSEs.

(d) & (e): An  initiative  of  Open  Network  for  Digital  Commerce  (ONDC)  for  empowering MSMEs to transact  goods  and  services  over  digital/electronic  network  has  been  taken  to  facilitate MSMEs. ONDC is  actively  working  with  Ministry  of  MSME  to  onboard  MSMEs  to  the  network through existing seller applications and also working to integrate MSME Mart which has over 2 lakh MSMEs, with ONDC. ONDC is working actively with States/UTs.

(f): Promotion, growth and development of Micro, Small and Medium Enterprises (MSMEs) sector is  a  continuous  process  and  Ministry  of  MSME  is  constantly  working  in  this  direction.  The schemes/programmes  inter alia include Prime Minister's  Employment  Generation  Programme (PMEGP),  Credit  Guarantee  Scheme  for  Micro  &  Small  Enterprises,  Micro  &  Small  Enterprises Cluster  Development  Programme  (MSE-CDP),  MSME  Champions  Scheme,  Entrepreneurship  Skill Development  Programme  (ESDP),  Procurement  and  Marketing  Support  Scheme  (PMSS),  etc. The components  of  PMSS,  which  inter  alia  include  Participation  of  Individual  MSEs  in  Trade  Fairs  / Exhibitions, Vendor Development Program, Adoption of Modern Packaging Techniques, Adoption of Bar Code, Adoption of e-Commerce Platform, etc. to promote trade of MSME Sector.

Additionally,  the  Public  Procurement  (Preference  to  Make  in  India)  Order  2017  (PPP-MII Order) was issued on 15th June, 2017 pursuant to Rule 153(iii) of the General Financial Rules, 2017 to promote domestic value addition and is applicable for procurement of goods, services and works by central  government procuring  entities. Further,  Global  Tender Enquiry  cannot be  issued for tenders less than Rs. 200 crore except in exceptional cases

(g): Vivad se Vishwas I - Relief for MSMES Scheme was launched by Government of India on 11.04.2023.  The  last  date  for  Submission  of  Claims  under  this  Scheme  was  31.07.2023.  Under  the Scheme  relief  by  way  of  refund  of  95%  of  the  deducted  performance  security,  bid  security  and liquidated damages is provided. Relief is also provided to MSMEs debarred for default in execution of contracts.  The  relief  provided  under  this  Scheme  is  in  continuation  of  the  ongoing  efforts  of  the Government in promoting and sustaining the MSME sector.

(h): Till 15.12.2023, relief has been provided against 30,944 claims of MSMEs amounting to Rs. 672.80 crore.

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