New govt purchase policy for MSMEs in pipeline

NEW DELHI, INDIA: The Federation of Indian Chambers of Commerce and Industry (Ficci), recently announced that a new Purchase Policy of the government for providing market support to the Micro, Small and Medium Enterprises (MSMEs) is in the offing.

The government has studied the purchase policy prevalent in the US and would come out with an MSME procurement policy that is likely to fix a certain percentage that government departments and ministries would have to buy from MSMEs based on the total amount of purchases made by them annually, said a press release.

“We are trying to work out a new purchase policy for procurement of MSME products by the government and trying to convince major buyers like the defence and the railways of the need to adhere to such a step,” Dinesh Rai, Secretary, Ministry of MSMEs said at the ‘Global SMEs Summit’, organised by FICCI in collaboration with the Ministry of MSMEs and the Confederation of Indian Small and Medium Enterprises recently.

Rai said that the Limited Liability Partnership Act would give more comfort to the MSME players and attract more capital into the MSME sector.

He also mentioned that in order to equip the MSMEs to face the competition from cheap imports, the government had launched the National Manufacturing Competitiveness Programme (NNMCP).

The programme envisages investment of Rs 1000 crore during the 11th Plan period for enhancing the entire value chain of the MSME sector, said the release.

Six of the 10 components of the NMCP were already operational – Quality Management Systems, Quality Technology Tools, Building Awareness on IPRs, Support for Entrepreneurial and Managerial Development, Marketing support/assistance to MSMEs Setting New Mini Tool Rooms and Lean Manufacturing Competitiveness Scheme.

Rai said that the remaining four components – Energy Efficiency, Marketing Assistance, Promotion of ICT and Design Clinic Scheme were under various stages of approval.

He further added that the government had asked banks to set up care centers to attend the credit needs of the MSMEs. All unresolved issues, he said, could be taken up with his ministry for early resolution.

Rai said the government was also setting up an MSME info call center for giving hands-on service to entrepreneurs.

“The programme would be implemented through the PPP mode with close physical and financial participation of the MSME sector,” added Rai and urged the MSME players to actively participate in the various NMCP schemes as these have the potential to take Indian MSMEs into a higher trajectory.

Amit Mitra, Secretary General, FICCI pointed out that timely availability of finance remained a major limiting factor for the growth of the SME sector.

To enable SMEs to access capital at lower rates, he suggested that efforts should be made to for earmarking priority sector lending for SMEs. He said it was also imperative to build synergies between SMEs and large enterprises.