Seeking a larger slice of public procurement pie, the SME sector has proposed small-ticket tenders so that they might participate within the bidding.
In its Budget tips, Federation of Indian Micro and Small & Medium Enterprises (FISME) has said that smaller corporations have become elbowed out from public procurement as orders are commonly bundled up making their size very huge.
Adding to the concerns, the government is increasingly getting projects performed on flip-key foundation via massive corporates that do not fall under public-personal-partnership (PPP) for the MSMEs.
“These practices need to be checked and remedial steps are taken,” the industry frame has written to Finance Minister Nirmala Sitharaman.
Public procurement as a percentage of GDP in the country Is expected at 20-22 in keeping with cent. Given the dimensions of the Indian economy ($2.7 trillion), the public procurement amounts to almost $500 billion annually. Central Public Sector Enterprises (CPSEs) are a prime contributor to public procurement of works, products, and services.
As in step with the modern policy, each relevant ministry, department, and PSUs are required to mandatorily procure 25 percent of their components yearly from the SME sector. But MSMEs were complaining that many government entities do not adhere to the rule of thumb.
The FISME has proposed beneficial price terms from the authorities to inspire an extra quantity of participants inside the bidding process particularly MSMEs.
It noted the instance of South Korea wherein MSMEs may be given an increase up to 70% of the acquisition rate. Similarly, an SME network loan software permits the SME sector to gain bank loans for as much as 80 consistent with the applicable agreement price to cover the expenses of settlement execution.
South Korean authorities also offer unique visibility to modern products from SMEs by way of which include them in a unique procurement KONEPS catalog. A comparable initiative can be undertaken through the GeM (Government E-market) platform in India,” the FISME has stated.