Revision of reserved items for govt procurement from MSMEs on the cards

Revision of reserved items for govt procurement from MSMEs on the cards
31 10 2013

Revision of reserved items for govt procurement from MSMEs on the cardsNew Delhi, Oct 31 (KNN) The government plans to carry out a revision of 358 items which are reserved for procurement from units belonging to the micro, small and medium enterprises sector.

The Office of the Development Commissioner has sought suggestions from the industry bodies in this regard.

The industry bodies have started the process of consultations before they submit their suggestions to the MSME Development Institute, FOSMI Secretary H Ganguly said.

Commending the proposal for revision of reserved items, “It is time that the list is reviewed. There are many items in the list that the government is no longer procuring and they need to be deleted; and new items can be added,” said Federation of Indian Micro and Small & Medium Enterprises Secretary General, Anil Bhardwaj.

In an effort to promote the MSME sector, the government had introduced reservation for manufacturing and government purchase.

As many as 358 items were reserved for government purchase. On reviewing the list, it is obvious that some items such as lanterns, anklets web khaki, blotting paper, circlips, candle wax carriage, among others are no longer in much demand and therefore can be struck off the list.

On the other hand, there are some products which are now being produced by MSME units, although they were not there earlier. Such items include automobile parts, computer parts and other high tech gadgets.

Reservation of items for exclusive manufacture in MSME sector statutorily provided for in the Industries (Development and Regulation) Act, 1951, has been one of the important policy measures for promoting this sector. The objectives of the Reservation Policy was to ensure increased production of consumer goods in the small scale sector; and expand employment opportunities through setting up of small scale industries. 

Non-MSME units could undertake manufacture of reserved items only if they could undertake 50 per cent export obligations. The number of items reserved for manufacturing is now negligible.

The policy of reservation of items for exclusive purchase has been promoted since late 60's as a measure of market support to the MSME sector. Although the stores purchase policy initially had six categories, from July 28, 1989, the Purchase Policy of the Government was modified in a major way and the categorisation of the items was reduced to the following two major groups – (1) Items of stores reserved for exclusive purchase from KVIC/Women's Development Corporations/Small Scale units and; (2) others not so reserved.

The first group comprised of 409 items earlier reserved for exclusive purchase from the small scale sector. The list of 409 items reserved for purchase from the MSME sector was reviewed and after deleting items having common nomenclature and making the entries more generic as well as addition of new items, a revised list of 358 items was approved by the Committee (set up to consider the question of inclusion of additional items) which also includes 8 handicraft items reserved for purchase from the Handicraft Sector.