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Policy in place but PSUs procure very little from Dalit enterprises

While procurement from SC/ST enterprises was way below target in 2013-14, that from all MSEs was much better at Rs 12,440.76 crore or 15.30 per cent of the total PSU procurement during the year.

Written by P Vaidyanathan Iyer | New Delhi | Updated: August 4, 2015 6:06:18 am

The first comprehensive survey of procurement undertaken by public sector undertakings (PSUs) from micro and small enterprises (MSEs) promoted by Dalit (Scheduled Castes/ Scheduled Tribes) entrepreneurs showed that their supplies were just Rs 419.37 crore in 2013-14 — 0.51 per cent of the total PSU procurement of Rs 81,319.28 crore during the year.

The government’s Public Procurement Policy for MSEs, Order 2012, issued on April 25, 2012, requires all central ministries, departments and central PSUs to ensure at least 20 per cent procurement from MSEs, and within this, 4 per cent from MSEs promoted by Dalits (SCs/STs).

While procurement from SC/ST enterprises was way below target in 2013-14, that from all MSEs was much better at Rs 12,440.76 crore or 15.30 per cent of the total PSU procurement during the year.

The policy announced during the UPA government, as part of its larger ‘affirmative action’ agenda, did not make it mandatory for the departments, ministries and PSUs to stick to the procurement order in the first three years. From April 1, 2015, it will be mandatory for ministries, departments as well as PSUs to meet the guidelines.

psuContrast this with the number of small and micro enterprises in the country and the share of Dalits and other backward classes. The 2013 survey by the National Sample Survey Office reveals there are 5.77 crore MSEs employing 12 crore people, and over 60 per cent of units are owned by persons belonging to SCs, STs and OBCs.

Anup Pujari, Secretary, Ministry of Micro, Small & Medium Enterprises (MSME), told The Indian Express that there needs to be more awareness on both sides – the PSUs and government, and the MSEs promoted by entrepreneurs from the backward community. “It is theoretically possible to increase procurement to 4 per cent from MSEs owned by SCs and STs. We need to make more efforts,” Pujari said.

When his comments were sought, R G Rajan, Chairman and Managing Director of Rashtriya Chemicals and Fertilisers, and the chairperson for Standing Conference of Public Enterprises (SCOPE), said while PSUs fared reasonably when it came to procurement from MSEs, identification was proving difficult in the case of Dalit entrepreneurs, “But yes, we need to undertake targeted vendor meetings. PSUs must be more proactive,” he said.

A National Board for Micro, Small and Medium Enterprises, chaired by Union Minister Kalraj Mishra, is scheduled to meet next month and the Dalit Indian Chamber of Commerce and Industry (DICCI), representing SC/ST entrepreneurs, also represented in the board, is expected to seek more active government support to sensitive PSUs.

DICCI president Milind Kamble told The Indian Express that the ministry and his chamber sent several reminders and letters to PSUs. “But I have not received response from a single PSU over the last two three years,” he said. In fact, the survey undertaken by the government states that 48 of 179 functional PSUs did not procure at all from SC or ST enterprises. The MSME ministry was awaiting information from 17 PSUs while 13 PSUs did not supply any data when the results were shared with the national board earlier this year.

The Office of Development Commissioner, MSME, sent at least seven reminders in 2012 and 2013 to secretaries of ministries and departments as well as CPSUs. After some PSUs complained about lack of clarity in identifying MSEs, the ministry issued a statement in June 2013 that an MSE in which 51 per cent is owned by SC or ST entrepreneurs should be considered as one promoted by Dalits for the purpose of procurement.

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