Procurement of raw materials by PSUs from MSMEs doubles

Union Minister Kalraj Mishra said sourcing of raw materials from micro, small and medium enterprises (MSME) by PSUs in the country has doubled following the government's mandate to procure a minimum of 20 percent raw material from the sector.

"The procurement of raw materials by PSUs from MSMEs has doubled since it was made mandatory by the government effective April 1, 2015," the MSME minister told reporters on the sidelines of the Make in India Week here today.

"Even though we had issued a notification to PSUs to purchase 20 percent raw materials from MSMEs long back, they were not doing so. However, once we made it mandatory, the procurement of raw materials from MSMEs by industries has doubled," he said, without disclosing figures.

Mishra further said he has personally written to all state chief ministers in this regard.

He acknowledged that MSMEs are today faced with a lot of problems. However, he was quick to add that the government is doing its best to address those issues.

"I believe that it is MSMEs' contribution that the country's economy is witnessing progress despite the ongoing global slump. I agree that the MSME sector in the country is currently faced with a host of problems and we are trying to address them through various measures at the ministry level," he said.

The MSME Ministry has formed a one-man committee under the chairmanship of former Cabinet secretary Prabhat Kumar to draft a comprehensive policy for MSMEs. The committee is likely to submit its report by June.

"We have received more than 1,000 suggestions for the draft so far. We are looking at those suggestions and will see how we can include them in the forthcoming MSME policy," Mishra added.

On the framework that had been created by the government some time back for revival and rehabilitation of MSMEs, which account for nearly half of the non-performing assets (NPAs) of banks from the industry sector, Mishra said, "RBI had put some query on the framework. However, we have replied to the RBI query and now, it is well on its track." On the forthcoming Union Budget, he said, "We are working out to provide more relief to MSMEs in the forthcoming Budget." He, however, did not elaborate.

Speaking about the progress on online portal for registration of MSMEs, he said 2.25 lakh registrations have already been completed through the portal.

He added that efforts are on to open 51 clusters and 500 incubation centres across the country.