Proposal to dilute procurement policy to help small units

In a setback to micro and small enterprises (MSEs), the administrative ministry has proposed to do away with the plan to make it mandatory for PSUs and the government departments to procure 20 per cent of their total requirements from these units.

Significantly, the new proposal of the Ministry of Micro, Small and Medium Enterprises sidesteps the recommendations of the task force headed by T K A Nair Principal Secretary to the Prime Minister.

The MSME Ministry has sent a revised note to the committee of secretaries to dilute its earlier proposal.
    
The policy would be "aspirational rather than mandatory" in nature, Secretary in the MSME Ministry Uday Kumar Varma said on the sidelines of a function here.
    
He was talking to reporters after the launch of a portal by Federation of Indian Micro and Small & Medium Enterprises.
    
The task force, which was set up at the instance of Prime Minister Manmohan Singh, had come out with a report in January after painstaking efforts of five months.
    
The MSME Secretary said, "Some ministries have few reservations on quality issues."
    
While he did not elaborate, it is understood that the Ministry of Petroleum had expressed such reservations.
   
The sector, which was hit-hard due to global economic crisis, contributes 8 per cent to the GDP, 45 per cent to the country's manufactured output and about 40 per cent to exports.
    
There are 2.6 crore MSME units in the country.