Tuesday, November 1, 2011

Green signal for public procurement policy, A boon for Micro & Small units




The Union Cabinet today approved the public procurement policy to boost micro, small and medium enterprises (MSEs).

Briefing reporters after the meeting, Information and Broadcasting Minister Ambika Soni said that all central ministries, departments and public sector undertakings to use the products prepared by these industries would be notified.

The MSEs, including the khadi, village and coir industries, constitute an overwhelming majority of this sector, contributing significantly to the gross domestic product, manufacturing output and exports.

In the overall production/value chains however, MSEs are highly susceptible to volatile market conditions. To address this inherent problems, many countries have put in place public procurement policies to support MSEs and to ensure a fair share of market to such entities.

Under the existing dispensation in India, the Government guidelines provide for support in marketing of MSE products through a variety of measures such as price preference, reservation of products for exclusive purchase from MSEs, issue of tender sets free of cost, exemption from payment of earnest money.

In practice, however, most of these facilities are not being provided to the MSEs by the Government Departments/CPSUs, etc.

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