PSUs should procure min 20% of requirement from SMEs: Minister
merisarkar news service April 24, New Delhi
20% procurement from PSU: Singh
Insisting that the Public Sector Units (PSUs) should procure at least 20 per cent of their requirements from the 2.6 crore small and medium units, the MSME Ministry has sought Prime Minister Manmohan Singh's intervention in the matter.
The Micro, Small and Medium Enterprises (MSME) are demanding that the government should make it mandatory for all government departments, public sector units and state-funded infrastructure projects to purchase 20 per cent of their requirements from the sector.
The government now procures a meager volume of 4 to 5 per cent from MSMEs, out of its annual Rs 1,70,000 crore purchase.
"We have asked them (Prime Minister and Finance Ministry) to look into the demand of the industry," MSME Minister Virbhadra Singh told the news agency.
According to the industry experts, government agencies impose criteria during bidding like minimum turnover and special brands, which the sector finds difficult to fulfill.
Singh also said that the sector has a huge potential to boost India's exports and compete with other foreign markets.
MSME contributes over 40 per cent to the country's total exports, which stood at USD 246 billion in 2010-11 and 45 per cent to manufacturing output.
Meanwhile, MSME Secretary Uday Kumar Varma said that the sector was facing challenges like availability of easy credit, modern technology, proper marketing of products and skill development in its growth.
"The level of funding is still not sufficient. We need to work upon it," Varma said.
The sector employs about 60 million people and contributes 8 per cent to the country's GDP.
