Small units, SCs/STs to get preference in govt purchases
The policy cleared by the Cabinet, ahead of assembly elections in five states including Uttar Pradesh, sets an annual target of 20 percent procurement for the Central Government departments and PSUs from MSEs.
Within this limit, four percent of the orders should be placed to the SC/ST entrepreneurs and 16 percent for others.
Briefing reporters after the Cabinet meeting, Information and Broadcasting Minister Ambika Soni described the decision as "path-breaking". It was also in line with the "Congress manifesto", she said.
Elaborating, Micro, Small and Medium Enterprises (MSME) Minister Virbhadra Singh said with announcement of the new policy, PSUs are expected to buy goods worth Rs 35,000 crore from the MSEs, of which a business of Rs 7,000 crore would go to the SCs/STs.
However, the procurement policy would be voluntary in nature for three years. It would be made mandatory after three years, he said.
The MSMEs, which account for 45 percent of the country's manufacturing output and 40 percent of exports, have also been hit by the rising input cost and interest rates.
The sector employs 60 million people in 26 million units producing over 6,000 products.