SMEStreet Survey: ‘55% Indian MSMEs are not happy doing business with PSUs’

SMEStreet Survey:  Doing Business with PSUs - MSME Perspective

In it’s bid to bring the real issues faced by the industry, SMEStreet have conducted a nationwide survey based market analysis on the subject of 'Doing Business with PSUs: MSME Perspective'.

According to this latest nationwide survey based market analysis, 55% of Indian MSMEs have mentioned that they are not satisfied while working with Public Sector Units (PSUs).

However, 58% MSMEs indicated that the most challenging element for their business development process in pitching the PSUs is the fact that they have to compete with large companies in order to present their business.

“The purpose of bringing the new Procurement Policy was ideally to ensure that MSMEs can get better share of procurement done by PSUs and therefore 20% of the total purchase of PSUs is advised to be procured from MSMEs only in this policy. But various provisions made in the policy are just the opposite of what the new policy was meant,” mentioned as a unanimous comment made by the heads of MSME Industries on the conditions of anonymity.

While giving a background perspective for conducting this survey, Mr Faiz Askari, Editor of SMEStreet emphasized, “This survey conducted by SME Street shows that the MSME sector in itself wants some major changes in this policy.”

Further to this, SMEs also expressed their concerns on some of the key issues faced by them, by adding, “In the new policy, only benefits stated as far as the issue of tender sets free of cost and the provision of exemption from bid bond have been retained from the old policy but other benefits as per old policy such as the provision of waiver of security deposits to the monetary limits of the MSME and 15% purchase preference on 100% of the total purchase quantity has been reduced to 20%. Thus, the new policy has made the business procurement scenario much worse than it was before.”

As a knowledge driven networking platform focused around the Indian MSMEs, SMEStreet is committed to bring relevant information which can be used to enhance the business ecosystem. “Understanding the actual on-ground issues of MSME sector is kept highest priority at SME Street. This survey based activity is part of a series of market research activity,” says Mr. Faiz Askari, Founder & Editor of SMEStreet. “This survey has analyzed one of the major industry wide issues. Government of India is committed towards uplifting the level of MSMEs and have introduced several policies and schemes in order to motivate and uplift the level of MSMEs in the country. New Procurement Policy is one of the major step in this direction, and we selected this topic after getting an understanding from the industry that there is a gap in between.

This survey is part of SMEStreet’s survey based initiative called ‘MSMEInsights’ in which industry trends and issues are getting addressed one-by-one.