Executive Summary:
This document presents the Ministry of MSME's response to questions regarding public procurement from Micro and Small Enterprises (MSEs), particularly those owned by SC/ST and women entrepreneurs. It outlines the existing Public Procurement Policy mandating procurement from MSEs by Central Ministries/Departments/CPSEs. The document also details procurement figures for FY 2023-24 and 2024-25, and the mechanisms in place to monitor and ensure adherence to the policy norms.
Key Points / Main Content:
* **Public Procurement Policy for MSEs:**
* Mandates 25% annual procurement from MSEs by Central Ministries/Departments/CPSEs.
* Includes sub-targets: 4% from SC/ST-owned MSEs and 3% from women-owned MSEs.
* MSEs receive tender sets free of cost and are exempt from Earnest Money Deposit.
* **Procurement Details (FY 2023-24 and 2024-25):**
* Details of procurement from MSEs by CPSEs are available on the MSME Sambandh Portal (Annexure I).
* Procurement from SC/ST and women-owned MSEs increased significantly in FY 2024-25.
* **Monitoring and Compliance Mechanisms:**
* MSME Sambandh Portal facilitates real-time monitoring of procurement targets.
* Udyam Registration Portal (URP) enables MSEs to link with the Government e-Marketplace (GeM).
* Vendor Development Programmes and Buyer-Seller Meets are conducted for SC/ST and women-owned enterprises.
* DPE includes compliance with MSE procurement targets in the performance evaluation of CPSEs, with failure leading to negative marking.
* **CPSE Performance (FY 2024-25):**
* 117 CPSEs did not meet the sub-targets for procurement from SC/ST and women entrepreneurs.
Impact Analysis:
* **Central Ministries/Departments/CPSEs:**
* Impact: Required to adhere to the Public Procurement Policy for MSEs, including specific targets for SC/ST and women-owned enterprises. Their performance is monitored and evaluated based on compliance.
* Action Required: Ensure procurement meets the mandated targets, utilize MSME Sambandh and GeM, and participate in Vendor Development Programs.
* **Micro and Small Enterprises (MSEs):**
* Impact: Benefit from preferential treatment in public procurement, including free tender sets and exemption from Earnest Money Deposit. SC/ST and women-owned MSEs have dedicated sub-targets.
* Action Required: Register on Udyam Registration Portal, link with GeM, and utilize MSME Sambandh Portal to explore opportunities.
* **SC/ST and Women Entrepreneurs:**
* Impact: Targeted beneficiaries of the Public Procurement Policy with specific procurement sub-targets aimed at promoting their participation in government contracts.
* Action Required: Register as MSEs, link with GeM, and participate in special Vendor Development Programmes and Buyer-Seller Meets.
Key Entities Referenced
Ministry of Micro, Small and Medium Enterprises: The central ministry responsible for policies related to micro, small, and medium enterprises in India.
Public Procurement Policy for Micro and Small Enterprises MSEs, Order, 2012: A policy that mandates a certain percentage of annual procurement by Central Ministries/Departments/CPSEs from Micro and Small Enterprises.
Central Public Sector Enterprises CPSEs: Public sector companies owned by the Government of India.
SCST: Refers to Scheduled Castes and Scheduled Tribes, historically disadvantaged groups in India. The policy includes specific procurement targets from MSEs owned by individuals from these communities.
MSME Sambandh Portal: A portal launched by the Ministry of MSME for real-time monitoring of procurement targets under the Public Procurement Policy.
Udyam Registration Portal URP: A portal for registering micro, small, and medium enterprises in India, which also facilitates linking with the Government e-Marketplace (GeM).
Government emarket GeM: An online platform for procurement of goods and services by government departments and public sector units.
Procurement and Marketing Support Scheme: A scheme of the Ministry of MSME that includes Vendor Development Programmes to create awareness among enterprises about public procurement opportunities.
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION NO. 3078
TO BE ANSWERED ON 07.08.2025
PUBLIC PROCUREMENT FROM MSMEs
3078. SHRI S VENKATESAN:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) the norms prescribed for Public Procurement by Ministries/Departments/PSUs from MSMEs
particularly from SC, ST and women entrepreneurs;
(b) the details of Public Procurement made by Ministries/Departments/PSUs from MSMEs
particularly SC, ST and women entrepreneurs during the last two financial years 2023-24 and 2024-25;
(c) whether the action has been initiated against Officials responsible for non-adherence in
fulfilling the norms applicable to Public Procurement from MSMEs including those led by SC, ST and
women entrepreneurs, if so, the details thereof;
(d) the details of Ministries/Departments/PSUs not fulfilling the norms for Public Procurement
from MSMEs particularly SC, ST and women entrepreneurs; and
(e) the mechanism to ensure adherence to norms for the Government procurement?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a): The Ministry of MSME vide Gazette Notification No. S.O. 581(E), dated 23rd March, 2012
notified the Public Procurement Policy for Micro and Small Enterprises (MSEs), Order, 2012. The
Policy (amended in 2018) mandates 25% annual procurement from MSEs by Central
Ministries/Departments/Central Public Sector Enterprises (CPSEs), including 4% from MSEs owned
by SC/ST and 3% from MSEs owned by women entrepreneurs. As per the Policy, MSEs must be
provided tender sets free of cost and they are exempted from payment of Earnest Money Deposit.
(b): The details of procurement made from MSEs during the last two financial years, 2023-24 and
2024-25, as per MSME Sambandh Portal, by CPSEs, are attached as Annexure-I.
(c) to (e): All possible efforts are being taken by the Ministry in coordination with CPSEs, to
adhere to the norms applicable for Public Procurement from MSEs.
As per MSME Sambandh Portal, there were 117 CPSEs, in case of which, the sub-target of
Procurement from SC/ST and women entrepreneurs for F.Y. 2024-25 was less than the target
mandated.: 2 :
The Ministry of MSME constantly monitors the progress under Public Procurement Policy and
following steps have been taken to ensure achievement of targets and sub-targets under the Policy:
MSME Sambandh Portal was launched in 2017 by the Ministry of MSME for real-time
monitoring of targets under the Policy. A database of MSE vendors along-with their social
category, for all major product categories and services is available (with open access) for the
procuring entities on MSME Sambandh Portal.
Udyam Registration Portal (URP) has a facility through which an entrepreneur can opt for
linking itself with Government e-market (GeM) place by selecting an option on URP. The
enterprise is linked to GeM Portal with this facility, MSEs can link themselves with the
Government’s procurement system and participate in Government’s mandatory procurement
programme from MSEs. Follow up with GeM for supporting SC/ ST and Women entrepreneurs
is done on a regular basis.
Under the Procurement and Marketing Support Scheme of the Ministry of MSME, Vendor
Development Programmes are organised for creating awareness among enterprises. Special
Vendor Development Programmes/ Buyer-Seller Meets are being conducted by Departments
and CPSUs for SC/STs and Women owned enterprises.
Under MoU framework on performance evaluation of CPSEs, DPE introduced compliance
parameter on procurement of goods and services through MSEs from FY 2021-22 onwards and
failure to achieve the targets (From MSEs) and sub-targets (From women-owned MSEs and
SC/ST owned MSEs) leads to negative marking while calculating the marks for the annual
performance of CPSEs.
In last two years, procurement from MSEs owned by SC/ST entrepreneurs increased by nearly
two times and reached Rs. 3,584.55 crore in FY 2024-25 and procurement from MSEs owned by
women entrepreneurs, with an increase of around two times, reached Rs. 5,972.20 crore in FY 2024-
25.
*****Annexure-I
Year wise annual procurement from MSEs by CPSEs in the last two years
F. Years Total Procurement from Procurement from Procurement from
Procurement MSEs MSEs owned by MSEs owned by
(Rs. in (Rs. in Crores) SC/ST Women
Crores) (Rs. in Crores) (Rs. in Crores)
2023-24 1,70,985.77 74,727.05 1,761.78 3,154.98
(43.70%) (1.03%) (1.85%)
(No. of MSEs (No. of MSEs (No. of MSEs
Benefited-2,58,449 Benefited-11,571 Benefited-21,340
2024-25 2,69,860.17 94,571.73 3,584.55 5,972.20
(35.04%) (1.33 %) (2.21%)
(As on (No. of MSEs (No. of MSEs (No. of MSEs
05.08.2025) Benefited-2,94,572) Benefited-21,483) Benefited-33,971)
Source: MSME SAMBANDH Portal