July 24, 2021

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Govt: CPSEs unable to procure mandatory 3% from women MSEs due to mismatch in demand, goods available

The government may also review the list of 358 items reserved exclusively for procurement from MSEs. (Image for representation)

Ease of Doing Business for MSMEs: Mismatch in requirements of central public sector enterprises (CPSEs) and goods produced by women-owned micro and small enterprises (MSEs) along with quality issues in products and their limited range are the reasons why government entities have not been able to meet the mandatory annual procurement target from women MSEs, Ishita Ganguly Tripathy, Additional Development Commissioner, Office of DC-MSME, Ministry of MSME told Financial Express Online. Women MSEs’ share in overall 25 per cent targetted annual procurement from MSEs by central ministries, departments, and PSUs has remained way below the 3 per cent target.

“In our discussions with CPSEs over this issue, they have identified three reasons: first, mismatch in their requirements and goods produced by women MSEs. Second, there are quality issues with women MSEs’ produced goods and third, the product range is also limited to cater to CPSEs needs,” said Tripathy.

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Even as procurement from women MSEs increased from Rs 232.56 crore across 1,410 enterprises in FY19 and Rs 393.56 crore from 3,667 enterprises in FY20 to Rs 725.54 crore from 4,935 enterprises in FY21, the share has managed to grow from 0.15 per cent to only 0.50 per cent in FY21, data from MSME Sambandh showed. In FY22 so far, the procurement from women MSEs stood at Rs 139.48 crore from 612 enterprises with a share of 0.69 per cent.

To improve women MSEs’ share, Tripathy said CPSEs agreed to procure services as well from such units apart from goods. Moreover, the government may also review the list of 358 items reserved exclusively for procurement from MSEs.

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“We have been telling CPSEs that while they are procuring goods, they can also look at services part. If goods and services are related, we could avail both. So that’s something they have taken positively that they can do it… Another thing we are exploring is that 358 items can be reviewed to help resolve some of these issues. Then there are vendor development programmes as well. We are meeting and telling them frequently that the procurement has to be improved. Hopefully, this would go up ahead,” added Tripathy.

Among the leading CPSEs, which procured goods from women MSEs in FY21, were Bharat Electronics that purchased Rs 86 crore goods from 576 women units, Hindustan Petroleum – Rs 95 crore from 476 units, GAIL (India) – Rs 48 crore from 32 units, Bharat Petroleum Corporation – Rs 23 crore from 203 units, Indian Oil Corporation – Rs 35 crore from 139 units, Hindustan Aeronautics – Rs 31 crore from 133 units, Power Grid Corporation – Rs 26 crore from 69 units, etc., data showed.

MSEs’ share in overall annual government procurement had jumped from 26.32 per cent in FY19 to 30.18 per cent in FY20 before declining to 28.04 per cent in FY21. SC/ST MSEs’ share had remained constant around 53-54 per cent since FY19 even as the procurement value dropped from Rs 824 crore in FY19 to Rs 692 crore in FY20, and Rs 753 crore in FY20. 

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