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'Don't delay MSME sourcing policy further'
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SME Times News Bureau | 24 Jun, 2010
The Indian industry has urged the government to make no further delay in approving the MSME procurement policy and to give MSEs (Micro and Small Enterprises) at least 15 percent reservation in the government's overall procurement.
The inter-ministerial difference among various government departments for sourcing close to 15 percent of procurement supplies from MSMEs have already been resolved and their should not be any hesitation in this regard, according to an analysis of the Associated Chambers of Commerce and Industry (ASSOCHAM).
The findings reveal dissatisfaction over the slow progress in approving the MSME procurement policy, pointing out that that 'Macro Small and Medium Enterprises Development Act, 2006' makes a mention that the MSMEs should receive government support in terms getting orders from various government department up to 15 percent of their total purchases.
"Even the task force set up under the chairmanship of Principal Secretary of Prime Minister on MSMEs has also recommended similar steps. However, not much has moved in this direction as yet," the assessment adds.
Releasing the the analysis, an ASSOCHAM spokesman said that considering the fact that MSMEs contribute to 45 percent of industrial output and 40 percent of exports, provide employment to nearly to 60 million, and create as many as 1 lakh jobs each year, MSMEs should have protection of assured supplies.
According to the analysis, approximately 10 lakh additional jobs can alone be generated in the MSME sector provided government makes it mandatory to source 15 percent of its entire purchases from them, without any preferential treatment.
It adds that the sectors in which maximum additional job creation is expected comprised auto, component, ancillaries, engineering, financial sectors like NBFC's , brokerage houses, and IT & ITes sector.
In addition, it views, the move would also facilitate MSMEs to effectively enhance their capacities expansion by way of receiving procurement orders from various departments as over 90 percent of them currently operate at less than 70 percent of their capacities for want of credit and supplies orders.
"Further delay is likely to harm this sector more as competition has already grown beyond anticipation and MSMEs despite making quality products are not getting their due share in government procurements," the ASSOCHAM analysis cautioned.
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PRICE PREFERENCE POLICY FOR SSI UNITS
VIKAS SINGHAL | Sat Dec 25 15:24:20 2010
For almost 20 years the 15% price preference policy for SSI units is in existence but has never been implemented.
It was said that this is a critical benefit available to SSI sector to compensate them on account of poor resource base, non availability of economics of scale etc.
But I doubt that this policy was ever implemented. In Aug.'10 The Delhi High Court has also issued a clarification for this policy then also the policy is not being implemented.
Does this price preference policy exist in the new MSME Procurement policy ?
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