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This ministry is leading public procurement from MSEs in FY23 and it’s not MSME, Defence or IT ministry

Ease of Doing Business for MSMEs: Among top PSUs buying from MSEs were Indian Oil Corporation, NTPC, Steel Authority of India, Bharat Heavy Electricals, Hindustan Aeronautics, South Eastern Coalfields, government data showed.

Ease of Doing Business for MSMEs: With the first half of the current financial year nearing its end this month, a number of central ministries have already procured goods worth crores from micro and small enterprises (MSEs) already. According to the government data, the highest procurement in terms of the value of goods was made by the Ministry of Petroleum and Natural Gas worth Rs 7,332 crore so far since April. Among the top three public sector unit (PSU) buyers under the petroleum ministry were Indian Oil Corporation (Rs 3,652 crore worth procurement from MSEs), Hindustan Petroleum (Rs 1,309 crore), and Oil and Natural Gas Corporation (Rs 485 crore).

Data from the public procurement monitoring portal MSME Sambandh revealed other top ministries also buying from MSEs in the current financial year. On the second spot was the Ministry of Power with purchases made worth Rs 1,905 crore as of September 6 in FY23 followed by the Ministry of Steel (Rs 1,755 crore), Ministry of Heavy Industries and Public Enterprises (Rs 1,323 crore), Ministry of Defence (Rs 1,156 crore), Ministry of Coal (Rs 993 crore), etc.

Among top PSUs from respective ministries buying from MSEs were NTPC (Rs 1,289 crore), Steel Authority of India (Rs 1,087 crore), Bharat Heavy Electricals (Rs 1,209 crore), Hindustan Aeronautics (Rs 276 crore), and South Eastern Coalfields (Rs 540 crore).

Overall, based on the data available from 54 ministries, the procurement made from MSEs in FY23 so far was 38 per cent of the total purchases made by the ministries amounting to Rs 15,914 crore. The total MSEs involved in selling to the government were 52,686. In FY22, the procurement made from MSEs was 32 per cent of the total procurement government undertook. 

Importantly, the government is now looking to procure all of its goods and services from the public procurement portal Government e-Marketplace (GeM). According to the commerce ministry, it is aiming for 100 per cent procurement through GeM by the end of FY23. The statistic on the current share of GeM procurement wasn’t available.

Chairing a review meeting of GeM in July this year, Commerce minister Piyush Goyal noted that procurement data generated on GeM will help the government in improving transparency and efficiency in public procurement. Moreover, the aggregation of demand via the procurement model through a single portal will also help in reducing the cost of procurement for the buyers, the minister had said.