Research & Publications

Research

Publication
Our report on new Public Procurement Policy (PPP) titled “MSME: The opportunity knocks” was released by Hon. Finance Minister Shri P. Chidamabaram on 6th june 2013 at Taj Palace.

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Implementation of Public Procurement Policy set to change SME landscape

Worldwide, the micro and small enterprises (MSEs) have been accepted as the engine of economic growth and for promoting equitable development. Even in India, MSMEs are the backbone of the socio-economic system, constituting over 90% of total enterprises (31m registered units) with a contribution of around 12%-13% of GDP, 45% of manufacturing output and 40% of exports. Their growth has been phenomenal despite the poor infrastructure and limited to access to finance.

The advent of Public Procurement Policy (PPP) will act as a driving force towards socio-economic reforms by creating a huge opportunity for the SME sector. The policy aims to make it mandatory for all public sector organisations to source minimum 20% of their total procurement from MSMEs (including 4% from SC/ST owned MSMEs) from FY16 and onwards. We estimate that this will create an incremental demand of INR17tn over FY14-20 for the SME sector, which will require a huge funding for their green-field and brownfield expansions.

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