The
Public Procurement Policy, 2012 for Micro and Small Enterprises (MSEs) mandates
twenty percent (20%) procurement of goods and services from MSEs by all Central
Ministries, Departments and Central Public Sector enterprises (CPSE’s) from FY
2015. An effective implementation of the policy requires a significant build-up
of knowledge and institutional capacity, nurtured over time to address the ever
growing challenges of public procurement for MSEs, CPSEs and other concerned
stakeholders. To enable this, CII organized a policy dialogue session with GIZ
titled “CII SME Policy Roundtable on Public
Procurement Policy” on 3 June, 2014 in New Delhi.
The
background document elucidates various elements of the Public Procurement
Policy and their implication on Indian MSMEs. It provides statistical data on
the size of the procurement market as well as the current status of procurement
from MSEs. Exposing a wide gap between the two, the report discusses the key
challenges and constraints thwarting the expansion of procurement from MSEs. It
segregates the nature of challenges on the basis of their origin into
regulatory challenges, demand side challenges and supply side challenges to
provide a unique and wholesome perspective of their magnitude. Taking into
account the current status of implementation and challenges faced by different
stakeholders, the report suggests that there is a need for coordinated efforts
and collaborative actions by all the stakeholders to effectively implement the
policy and derive the intended benefits. For the successful implementation of
the policy, the report contains suggestions for both the Ministry of MSME as
well as CPSEs.
Some of the most important recommendations to the Ministry discussed in the report include the following:
Strengthening the institutional structure:
- Development of effective ICT tools
- Evolution of better communication methods
- Effective monitoring and grievance redressal systems
- Improved MSE registration and data consolidation system
Among the most the relevant recommendations to CPSEs, the following are included:
Simplification of vendor registration process:
- Enhancement in the use of standardized tender documents
- Regular conduct of Vendor Development Programmes for engagement with MSEs
- Clear communication of expected quality standards and product specifications