Women MSEs’ share in govt procurement remains dismal despite YoY growth in value – here’s why

Bharat Electronics, Hindustan Petroleum, GAIL (India), Bharat Petroleum Corporation, Indian Oil Corporation, and more were the leading CPSEs that procured goods from women MSEs in FY21.

Ease of Doing Business for MSMEs: Even as public procurement from women-owned enterprises hit a record level in the financial year 2020-21, their share in 25 per cent mandatory annual procurement from micro and small enterprises (MSEs) by central ministries, departments, and PSUs have remained dismal. The annual procurement target for government buyers from MSEs was revised in 2018 to 25 per cent from earlier 20 per cent of their total annual purchases. The 25 per cent procurement included a 3 per cent target from women-owned MSEs which the government has failed to meet every year.

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While procurement from women-owned MSEs grew from Rs 232.56 crore across 1,410 enterprises in FY19 and Rs 393.56 crore from 3,667 enterprises in FY20 to Rs 724.81 crore from 4,926 enterprises in FY21, the share has managed to crawl up from 0.15 per cent to 0.50 per cent in FY21 while the annual target has been of 3 per cent, data from MSME Sambandh showed. In FY22 so far, the procurement from women MSEs stood at Rs 138.13 crore from 600 enterprises with a share of 0.69 per cent.

Comments from the Office of Development Commissioner, Ministry of Micro, Small & Medium Enterprises were not available immediately for this story.

“The challenge is both ways – lack of awareness among women entrepreneurs and government has also been not very keen. Either they wouldn’t need the product or women wouldn’t know how to approach or they simply would have no idea about it. After multiple inputs, the government had agreed to a 3 per cent annual target but there’s no headway as such. Also, payments delay is a big issue. It is tougher for women entrepreneurs to get payments on time. Women entrepreneurs are ready to engage but then payment issue is a barrier. The attitude of government as well has been lukewarm,” Rajni Agrawal, President, Federation of Indian Women Entrepreneurs told Financial Express Online.

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Among the leading CPSEs, which procured goods from women MSEs in FY21, were Bharat Electronics that purchased Rs 86 crore goods from 576 women units, Hindustan Petroleum – Rs 95 crore from 476 units, GAIL (India) – Rs 48 crore from 32 units, Bharat Petroleum Corporation – Rs 23 crore from 203 units, Indian Oil Corporation – Rs 35 crore from 139 units, Hindustan Aeronautics – Rs 31 crore from 133 units, Power Grid Corporation – Rs 26 crore from 69 units, etc., data showed.

“Not enough attempts have been made from both ends – government as well as women entrepreneurs towards enhancing participation in public orders. Women enterprises aren’t very large in number and majority of them are micro-enterprises. However, PSUs should come forward in engaging with women enterprises for buying goods but it is also a question of volume and quality. Here, to improve quality, women entrepreneurs can approach the government’s tool rooms for training and development processes. Government should also conduct specific training and motivational programmes for women and have banks’ participation as well to address the credit-related challenges,” Manguirish Pai Raikar, Chairman, National Council for MSME, Assocham told Financial Express Online.

Overall, the share of MSEs in total annual government procurement had increased from 26.32 per cent in FY19 to 30.18 per cent in FY20 but contracted to 28.04 per cent in FY21. On the other hand, the share of SC/ST MSEs had remained constant around 53-54 per cent since FY19 even as the procurement amount had declined from Rs 824 crore in FY19 to Rs 692 crore in FY20, and Rs 753 crore in FY20.