Odisha policy to mandate 20% procurement from local MSEs

Odisha is contemplating to come out with a policy mandating the state government organisations and state public sector undertakings (PSUs) to purchase from the local micro and small enterprises (MSEs).

"A MSME procurement policy asking the state PSUs and government organisations for mandatory procurement of 20 per cent from the local MSEs is on the anvil in line with the policy framed by the Union government," Panchanan Dash, secretary, MSME department told Business Standard.

Dash said that there will be a sub-target of four per cent for procurement from MSEs owned by entrepreneurs from scheduled castes and scheduled tribes (SC/ST) communities.

Sources said that the policy which is in draft stage will be put before the state cabinet after vetting and approval of the Chief Minister's office.

MSEs are highly susceptible to volatile market conditions. To address this inherent problem, many countries in the advanced world have put in place public procurement policies to support the MSME sector and to ensure a fair share of market to the entities. Also in India, the Union government through a policy mandates all central government PSUs to procure 20 per cent of their annual requirement from MSEs (micro and small enterprises).

The central policy has made it mandatory for CPSUs to achieve the 20 per cent target in three years (2015).

As per latest census, there are about 1.5 million MSME units in the state providing jobs to about 3.3 million people.