Government buying from small businesses, surpass annual target

As per data, for different ministries out of 54 ministries listed on the monitoring portal MSME Sambandh, in procuring minimum 25 per cent of the yearly buying from MSEs, 16 ministries have been able to cross the target as FY20 nears the end.

   
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While government buyers may not be the best customers for small businesses when it comes to making payments but a number of them seem to be ensuring the buying target from micro and small (MSE) enterprises in their annual procurement is met.

As per data, for different ministries out of 54 ministries listed on the monitoring portal MSME Sambandh, in procuring minimum 25 per cent of the yearly buying from MSEs, 16 ministries have been able to cross the target as FY20 nears the end.

The top ministries, which have bought the maximum amount of goods and also surpassed the 25 per cent cap, were Ministry of Petroleum and Natural Gas, Ministry of Defence, Ministry of Power, Ministry of Atomic Energy, Ministry of Coal etc.

The total procurement from MSEs so far stood at Rs 32,861.97 crore — 28.99 per cent of over Rs 1.13 lakh crore worth of overall buying in FY20 so far. While Petroleum ministry MSE buying stood at Rs 17,888 crore, Defence ministry procured goods worth Rs 2,664 crore followed by Rs 2021 amount of procurement made by Power ministry, Rs 800 worth buying from Ministry of Atomic Energy and Rs 628.6 worth from Ministry of Coal among the top five buyers.

Meanwhile, other top buyers exceeding the 25 per cent minimum threshold were ministries of agriculture, commerce, housing and urban affairs, mines, minority affairs, railways, road transport and highways, science and technology, shipping, textiles, and tribal affairs.

Statistics claim that the number of MSEs benefitting from the public procurement programme was over 1.28 lakh including 5,030 MSEs owned by SC/ST entrepreneurs and 2,839 women-owned MSEs.

In fact, the government’s online marketplace GeM for public procurement has 77,116 MSE sellers out of over 3.44 lakh sellers. However, MSE sellers account for a majority — 53.27 per cent of the order value on the portal so far. The total transaction value recorded so far was Rs 49,438 crore.