The government is likely to announce soon a purchase preference policy for micro and small enterprises (MSEs). The policy makes it mandatory for all central government ministries, departments and central public sector enterprises (CPSEs) to source at least 20 per cent of their annual purchases from MSEs.

H P Kumar, CMD, National Small Industries Corporation (NSIC), under the ministry of micro, small and medium enterprises (MSME), told Financial Chronicle, “ We have been pushing for this for some time. This should come through now. The idea behind the proposal was to aid micro and small enterprises by underwriting the critical business development aspect.”

Kumar said the purchase preference policy was a result of a proposal under the provisions of the micro , small and m edium enterprise development (MSMED) Act, 2006 which provided that the Government might notify preference policies in respect of procurement of goods and services, produced and provided by micro and small enterprises, by its ministries or departments, as the case may be, or its aided institutions and public sector enterprises.

Top economies of the world including the US, EU and Japan have set-aside programmes for procurement from MSMEs with the quota of public procurement from small businesses going as high as up to 30 per cent in US. Anil Bhardwaj, secretary general, federation of Indian small and medium enterprises (FISME) said, “In India there is no quota as yet. There are norms that recommend that a price preference may be given to MSMEs in government procurement. However, no government department adheres to these guidelines.” NSIC CMD pointed out that payment in government buying was assured upon supply of goods and services, as also credit was easy to procure with a government order in hand.