Exclusive: Govt looking at making provisions on GeM portal to boost procurement from SC/ST MSMEs

A sub-target of 4 per cent from SC/ST-owned MSEs and 3 per cent from women-owned MSEs were earmarked out of the overall 25 per cent target for government buyers to procure from MSEs annually.

Ease of Doing Business for MSMEs: In order to boost public procurement from scheduled caste/scheduled tribe (SC/ST) entrepreneurs in the country, the government is looking at making provisions on the Government e-Marketplace (GeM) portal that would also help enhance SC/ST MSMEs’ share in the overall 25 per cent annual procurement target of government buyers from micro and small enterprises. Milind Kamble, Founder Chairman of the trade association for dalit entrepreneurs, DICCI in a meeting with MSME Ministry Joint Secretary Mercy Epao and Secretary B.B Swain on Wednesday was told that a ‘window’ for improving procurement from SC/ST MSMEs would be created.

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“In our afternoon meeting, Joint Secretary Ipao informed that the government had talked to the GeM CEO about this. She said that provisions to boost procurement from SC/ST entrepreneurs via GeM would be made soon,” Kamble told Financial Express Online. 

The government had earmarked a 25 per cent yearly procurement target by MSEs for central public sector enterprises (CPSEs) from April 1, 2015, onwards up from 20 per cent earlier. A sub-target of 4 per cent from SC/ST-owned MSEs and 3 per cent from women-owned MSEs were earmarked out of the 25 per cent target. A total of Rs 40,733 crore worth procurement was made from MSEs in FY21 – highest since FY15, as per data from the MSME Sambandh portal. The procurement was 28 per cent of the overall public procurement made by the government worth Rs 1.44 lakh crore during FY21.

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Comments from the MSME Ministry for details related to the development were not immediately available for this story. 

“We had requested GeM for making provisions for enhancing procurement from SC/ST entrepreneurs especially. We have pushed the issue now. Currently, every government department is buying from GeM but I cannot tell them that we are SC/ST MSMEs and that departments should look at procuring more from us. Buyers should know when they come to the GeM portal that these sellers are SC/ST entrepreneurs, otherwise, such sellers would always remain invisible in the overall seller base. They should be highlighted in order to help government departments meet their procurement targets,” said Kamble.

Since SC/ST units are supplying along with the rest of the seller base, the procurement numbers are not able to reflect SC/ST share correctly, he added. “GeM should run a constant ticker somewhere on its website that all CPSUs should procure 4 per cent from SC/ST MSMEs and 3 per cent from women entrepreneurs.”

Importantly, the annual procurement targets of 4 per cent from SC/ST and 3 per cent from women entrepreneurs have never been met by the government buyers so far. In fact, the annual procurement from SC/ST units was highest at 0.54 per cent in FY19 and 0.50 per cent from women units in FY21, data showed.

“Mismatch is primarily the reason for this because CPSEs requirements don’t really match with what women or SC/ST entrepreneurs are making. Then there are quality issues as well while product range is also very limited. Hence, the percentage hasn’t really gone up,” Ishita Ganguly Tripathy, Additional Development Commissioner, Office of DC-MSME, Ministry of MSME had told Financial Express Online.

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While Gem CEO Prashant Kumar Singh agreed that there have been discussions with the government on the need for public buyers to achieve the procurement targets, he said that the targets from SC/ST or women entrepreneurs are not explicitly shown during every purchase.

“Procurement level has to be maintained on overall basis instead of at the tender level to say that out of purchase worth, for example, Rs 100, the buyer has to buy Rs 25 goods from MSEs. We are trying to refine it further even as buyers are aware of their targets from SC/ST and women sellers. We don’t show this in every purchase. It is up to the buyer to maintain this target on his total annual procurement. We had discussed with the government that how can buyers maintain their targets. This is a work-in-progress while we also need to make some modifications in terms of telling upfront that how much is the Make in India content in the product, which category the seller belongs to, etc.,” Singh told Financial Express Online.

In the current financial year so far, the procurement share from SC/ST entrepreneurs is highest so far at 0.70 per cent (Rs 351 crore worth procurement) since FY15. Also, the overall MSE procurement share is highest at 31 per cent (Rs 15,620 crore) based on the procurement made so far by the government buyers. Kamble is optimistic that the SC/ST MSEs share in 25 per cent MSE share should touch 1 per cent this financial year. “Generally, the government buys more in the last quarter of the financial year. I’m optimistic that it should touch 1 per cent from 0.70 per cent currently as the economic activity continues to recover,” Kamble added.