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Govt eases public procurement norms for MSME startups

MSME Minister Kalraj Mishra

MSME Minister Kalraj Mishra

Government today relaxed procurement norms related to experience and turnover for micro, small and medium startups with a view to enabling these ventures to be part of its public procurement.

From April 2015, all PSUs, central government ministries and departments have been directed to procure at least 20 per cent of products and services required by them from micro and small enterprises.

“If the MSMEs can deliver the goods and services as per prescribed technical & quality specifications, the norms on prior experience and prior turnover will be relaxed for them,” the MSME Ministry said in a release.

The move will enable startup MSMEs to be a part of the mandatory 20 per cent public procurement, it said.

“The relaxation has been made to create a conducive environment for the startups in India, which is high on the agenda of the government,” the MSME Ministry said.

A review of the mandatory procurement policy by MSME Minister Kalraj Mishra last month had found that less than half of the PSUs were complying with the mandatory 20 per cent procurement of products and services from micro and small enterprises.

Besides, to ensure better implementation of quality management standards/quality technology tools scheme under the National Manufacturing Competitiveness Programme, MSME Ministry has decided to conduct two international study missions in collaboration with CII and Consultancy Development Corporation in this fiscal ending March as well as in next financial year.

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Jayant Tewari - Out-Sourced CFO March 14, 2016 15:15

Unfortunately this is an ages old relaxation which has never been implemented by the respective purchase departments in the numerous ministries ….. whether it’ll be implemented after this re-iteration is anyone’s guess.
The real issue is cartelisation of the Govt’s tender process which requires entrenched vendors to be displaced …. a bureaucratic challenge indeed !!!