Updated on July 06, 2024 11:46:30 PM
The policy aims to promote MSME's participation in public procurements and support them in marketing their products and services. The MSME sector is essential for the economic growth of the country.
To achieve this objective, the Government has notified specific rules and regulations, such as 25% of total procurement should happen from micro, small & medium industries. Per the rules, at least 4% of it should be procured from SC/ST entrepreneurs.
Government procure goods and services through various government portals and tenders such as GeM (Government e-Marketplace) or e-tender and procurement portals.
In this article, we will learn about various aspects and regulations of this policy in brief detail.
Public Procurement Policy for MSMEs
Public procurement is goods and services by a public agency such as a government or state-owned enterprise as public procurement accounts for a significant part of the total purchases done by the Government from the local market, i,e. Instead of importing goods and services from foreign countries.
To boost the local market & Indian industry, the Government has proposed a policy under which all governments are obliged to procure products manufactured in India from local suppliers such as MSMEs.
The policy's overarching goal is for the Central Ministries, government departments, and public sector organizations to purchase at least 25% of their goods and services yearly from MSMEs.
The policy has already helped achieve a sub-target of 4% purchase of products and services from the MSEs owned by SC or ST Entrepreneurs out of the 25% total.
The MSME Public Procurement Policy was announced to go into effect on April 1, 2012, by the Indian Ministry of MSMEs. The intention of fostering the growth and development of Indian MSMEs via the improvement of their access to and connections with relevant markets.
The core of procurement policy rests on the core tenet of competitiveness and quality of the goods and services with effective pricing.
All the registered micro, small and medium industries are eligible to participate in public procurement. Special provisions are made for MSMEs owned by SC/ST entrepreneurs.
The MSME would be considered owned by SC/ST entrepreneurs if:
The MSME public procurement policy applies to all government entities, including PSUs, irrespective of the nature or magnitude of their purchase. The exception is only made for the ministry of defence, where arms imports are excluded from the 20% procurement goal for the ministry of defence.
Government agencies or PSUs could appeal to the review committee for an exemption from mandatory purchases if they considered MSMEs irrelevant for their particular purchase items.
MSMEs have trouble getting into the public procurement market because they need more information. They need more skills. The registration, contracting, and bidding processes are complex, and they have to wait a long time to get paid.
In addition to the procurement goal, this policy also tells the organizations buying to do things like vendor development programmes, buyer-seller meetings, and outreach activities.
These things could make it easier for MSMEs to participate in public procurement.
GeM (Government e-Marketplace) is the most significant contributor to government procurements from the micro, small and medium industries. It contributes almost 30% of the Government's total public procurement target of 25%.
Local suppliers can register themselves on the GeM portal and list their brands or products in the desired category. GeM works as a mediator for MSMEs and state-owned agencies. Once the vendor is listed and their services are online on the portal, they can participate in live tender as per their category.
The Government of India has issued General Financial Rules (GFRs) regulations. All Government Departments and designated Bodies must comply with these Orders and Rules as executive instructions.
There are specific GFR rules which dictate procurement through the GeM portal.
These rules are required by all buyers when making purchases on the GeM portal.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
.svg)
Call us on 011-45518998
+91 9821113117
[Mon - Sat, 10am - 7pm]
Write to us
809, 8th Floor, Madhuban Building,
Nehru Place, New Delhi - 110019
Reliable
Affordable
Assurity
They've been very helpful in our registration with ICEGATE. It was a small thing with a small amount paid which somehow escalated to a very painful procedure. Never did they say "You've only paid so much. It's too much effort for us.".
Very pleased with their service. Prompt, professional and great communication. Definitely recommend. Special mention for Ms. Razia - she handled our case.
Professional Utilities is fully professional in their work, Rates are too low and genuine. Services and satisfaction are high so I highly recommended Professional Utilities.
They are one of the most genuine and reasonable people. I applied for lmpc certificate through them and they charged me a very nominal amount as compared to what other firms asked .
