HPCL, FCI, Indian Oil, NSIC top buyers of SC/ST owned MSEs in FY21 so far amid 12% jump in govt buying

Ease of Doing Business for MSMEs: Central public sector enterprises (CPSEs) have been able to purchase goods and services worth Rs 349.30 crore from micro and small enterprises (MSEs) owned by scheduled caste/scheduled tribe (SC/ST) entrepreneurs in the financial year 2020-21 so far, according to the available government data. This is up 12 per cent from purchases worth around Rs 315 crore made during the year-ago period (April-December FY20). The government had revised the annual public procurement target in 2018 from MSEs from earlier 20 per cent to 25 per cent of their total annual purchases to benefit the latter. The 25 per cent procurement included a 4 per cent target from MSEs owned by SC/ST entrepreneurs and a 3 per cent target from women-owned MSEs.

Hindustan Petroleum Corporation Limited, Food Corporation of India, Indian Oil, National Small Industries Corporation, and Bharat Electronics were among the top CPSEs purchasing goods from 1861, 268, 209, 170, and 149 SC/ST MSEs respectively in FY21 so far, according to the data sourced from the public procurement monitoring portal MSME Sambandh. However, CPSEs were able to procure only 0.55 per cent (Rs 685.15 crore goods from 6,312 SC/ST MSEs) of the targeted 4 per cent annual buying in FY20 while the procurement in FY21 so far stood at only 0.61 per cent benefitting 3,620 such MSE. While the total MSE procurement in FY20 was worth Rs 38,386 crore (30.95 per cent of overall government buying) from 1.56 lakh units, the purchases for FY21 so far was worth Rs 18,955 crore (33.25 per cent) from 89,866 MSEs. Overall government buying was worth Rs 1.24 lakh crore in FY20 and Rs 57,004 crore in FY21 so far.

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The digital purchase from MSEs gained significance this year amid the Covid pandemic as physical retail was highly disrupted post-March and during the following lockdown period. The government had also urged both buyers and sellers to register on the public procurement marketplace Government e-Marketplace (GeM) and leverage technology for an end-to-end transaction.

However, amid the growing adoption of the GeM portal, Commerce Minister Piyush Goyal had in August cautioned sellers against selling goods of inferior quality or charging high prices. The minister had also stressed that sellers engaging in such activities will be blacklisted not only from the GeM portal but from the “entire government ecosystem.”