Centre urges Odisha to ask PSUs to buy 20% procurement from SMEs

Business Standard,

The Union ministry of MSME (micro, small and medium enterprises) today urged the state government to make it mandatory for the state-level public sector undertakings to procure at least 20 per cent of their product and service needs from small and medium enterprises (SMEs), in line with the Centre’s policy.

“The Union minister has already written to the chief ministers of the states, including Odisha, to make similar reservations for the state PSUs and CPSUs for strengthening the SMEs,” said S N Tripathi, joint secretary (SME), Union ministry of MSME.

Tripathi was speaking at the inaugural ceremony of the second edition of the Odisha MSME International Trade Fair-2014 organised by Department of MSME and National Small Industries Corporation Limited.

The Union government in its new procurement policy mandates all Central government PSUS to procure 20 per cent of their annual requirement from SMEs.

Of the 20 per cent target, there is a sub-target of four percent that is earmarked for procurement from the SMEs owned by entrepreneurs from the Scheduled Castes and Scheduled Tribes (SC/ST) communities.

“The proposal of the Centre is under consideration and a notification regarding this will be issued soon by the MSME department,” said Nityananda Palai, director of industries, Odisha government.

The policy has made it mandatory to achieve the 20 per cent target for all CPSUs in 3 years (2015).

Speaking on the occasion, Odisha Governor, S C Jamir said that MSMEs, especially in the traditional sector, are not cost effective, escalating the price of the products facing stiff competition from others.

“We must concentrate on R&D (research and development) to evolve modern production infrastructure and make the SMEs technologically competent to meet the increasing levels of domestic and global competition arising from economic liberalisation and market reforms,” he added.

Jamir also urged the banks to give special attention to financing the micro and small entrepreneurs.

State MSME secretary Panchanan Dash and P Udaya Kumar, director, NSIC also spoke.

Source: Business Standard