‘PSUs are Not Serious about Procurement Policy, Because of No Penalty Clause

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The public procurement policy is not taken seriously by the Public Sector Units (PSUs) and there is lack of accountability for not following the mandatory 20% procurement rule, opined the industrialists and economists.

Last year in April, all PSUs, Central Government Ministries and departments were directed to mandatorily procure at least 20 per cent of products and services required by them from micro and small enterprises (MSEs). But the PSUs have failed to do so. The industry and the experts said that the policy should be implemented in a stricter way and those not abiding by it should be held accountable.

After reviewing the public procurement policy, Union MSME Minister Kalraj Mishra has directed Secretary (MSME) to identify top 50 CPSUs and get a meeting organized at Ministers level so that concerned CPSUs can be sensitized towards meeting the requirement of Public Procurement Policy of MSMEs.

According to an official release, it was found that the share of MSME procurement is less than 10% against a mandatory 20% and that of SC/ST entrepreneurship share is less than 0.2% against a mandatory 4%.

TANSTIA has urged the MSME ministry to discuss the matter with Prime Minister Narendra Modi. “Whoever is not achieving the target should be penalized,” he added.

Muthusami suggested that two months are left in this fiscal year and PSUs should do maximum procurement now to achieve their target.

SMEStreet Desk

SMEStreet is fast growing platform dedicated to entrepreneurs from small and medium sized businesses (SMEs). Committed to facilitate Knowledge & Networking for Business Growth, SMEStreet offers value added content which shows the actual voice of Indian MSMEs.

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