Lok Sabha Question No. 3643 (UNSTARRED), answered on 2016-08-08
Subject: Public Procurement Policy
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: SUSHIL KUMAR SINGH, ANURAG SINGH THAKUR

3643.

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

## LOK SABHA UNSTARRED QUESTION No. 3643 TO BE ANSWERED ON:  08.08.2016

## PUBLIC PROCUREMENT POLICY

SHRI SUSHIL KUMAR SINGH:

SHRI ANURAG SINGH THAKUR:

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

- (a) whether the Government  has fixed a minimum percentage of procurement of produce from the  Micro,  Small  and  Medium  Enterprises  (MSMEs)  by  the  Central  Government  departments ministries etc. if so, the details thereof;
- (b) whether the Government holds regular meetings of review committee established under the Public Procurement Policy Order, 2012;
- (c) if  so,  the  details  thereof  along  with  the decisions taken in the last such meetings and the follow up action taken by the Govt. thereon;
- (d) whether any amendments have been made by the Government in the list of items reserved for procurement from MSME units without approval of the review committee and if so, the details thereof; and
- (e) whether  the  Government  provides  incentives  to  the  MSMEs  to  market  and  sell  their products; if so, the details  thereof?

## ANSWER

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

(a):      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 to  be  done  from  Micro  &  Small  Enterprises  by  Central  Ministries/Departments/PSUs.  w.e.f.    1 st 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.

(b)&(c):    Review  Committee  meetings  are  held  as  per  para  12  of  the  Policy.      Till  date  5  such meetings have been held on 31.3.2014, 3.3.2016, 6.4.2016, 27.5.2016 and 12.7.2016.

Depending upon issues raised, various decisions have been taken by the Review Committee which include  granting  one  time  exemption  to  CISF  for  procurement  of  74,375  meters  of  Cloth Shirt Angola from Non-MSEs, appointment of Handicrafts and Handloom Exports Corporation of India  Ltd.,  New  Delhi  and  Tribal  Cooperative  Marketing  Development  Federation  of  India  Ltd., New Delhi  as aggregators for  source of supplier for Handicraft items,   and issue of clarification relating to products covered under Sl. No. 202 of the Policy relating to Paper Conversion Products.

(d): No  amendments  have  been  carried  out  in  the  list  of  358  items  reserved  for  exclusive procurement from Micro and Small Enterprises.

(e): The  Public  Procurement  Policy  is  applicable  only  to  Micro  and  Small  Enterprises.    The following benefits are provided to the registered MSEs:-

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 atleast 20% of the total tendered value.
4. 358 items are reserved for exclusive procurement from MSEs.

Financial  Assistance  is  provided to MSEs in the form of  Space Rent,  Air fare etc  for participating in  Domestic Trade Fairs and      International  Trade Fairs,    in order to  market and sell their products   under Marketing Assistance & Technology Up-gradation (MATU) scheme.

Financial Assistance is also provided for obtaining Bar Code one time registration fee and Annual recurring fee (for first three years).

Under the International Cooperation Scheme, financial assistance is provided on reimbursement  basis  to  MSMEs  for  deputation  of  business  delegation  to  other  countries  for exploring new areas of business, participation of Indian MSMEs in international exhibitions, trade fairs,  buyer  seller  meet  and  for  holding  international  conference  and  seminars  which  are  in  the interest of MSME Sector.

Under  another    Marketing  Assistance  Scheme  ,  which  is  being  implemented  through National Small Industries Corporation(NSIC), financial assistance is provided in order to promote marketing  efforts  and  to  enhance  the  competency  of  the  MSMEs  for  capturing  the  new  market opportunities way of organizing/participating in various domestic & international exhibitions/trade fairs, buyer-seller meet, intensive campaigns/seminars and consortia formation.

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