Order, 2012

Text

Reproduced from the document India Code holds for this instrument. The Gazette prints Hindi and English side by side and this is the English; the Department's own PDF remains the authority.

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MEDIUM ENTERPRISES

New Delhi, the 23rd March, 2012

ORDER

s.O. 581(E).-Whereas, the Central Government Ministries, Departments and Public Sector Undertakings shall procure minimum of20 per cent of their annual value of goods or services from Micro and Small Enterprises;

And whereas, the Public Procurement Policy shall apply to Micro and Small Enterprises registered with District Industries Cen~ers or Khadi and Village Industries Commission or Khadi and Village Industries Board orCoir Board or Nattonal Small Industries Corporation or Directorate of handicrafts and Hand loom or any other body specified by Ministry of Micro, Small and Medium Enterprises;

And whereas, the Public Procurement Policy rests upon core principles of competitiveness, adhering to sound procurement practices and execution of orders for supply of goods or services in accordance with a system which is fair, equitable, transpa_rent, competitive and cost effective; and And whereas, for factiltating promotion and development of micro and small enterprises, the Central Government or the State Government, as the case may be, by Order notifY from time to ume, preference policies in respect of procurement of goods and services, produced and provided by micro and small enterprises, by its Ministries or Departments, as the case may be, or its aided institutions and public sector enterprises.

Now, therefore, in exercise of the powers conferred in section II ofthe Micro, Small and Medium Enterprises Development (MSMED)Act 2006, the Central Government, by Order, notifies the Public Procurement Policy (hereinafter referred to as the Policy) in respect of procurement of goods and services, produced and provided by micro and small enterprises, by its Ministries, Departments and Public Sector Undertakings.

2. Short title and commencement.- (I) This Order is titled as 'Public Procurement Policy for Micro and Small Enterprises (MSEs) Order.

(2) It shall come into force with effect from I st April

3. Mandatory procurement from Micro Small and Enterprises. -- ( I ) Every Central Min is try or Department or Public Sector Undertaking shall set an annual goal of procurement from Micro and Small Enterprises from the financial year 2012-13 and onwards, with the objective of achieving an overall procurement of minimum of 20 per cent, of total annual purchases of products produced and services rendered by Micro and Small Enterprises in a period of three years.

1036 Gl/12-3

(2) Annual goal of procurement also include sub­ contracts to Micro arid Small Enterprises by large enterpmes and consortia of Micro and Small Enterprises Jorrned by National Small Industries Corporation.

(3) After a period of three years i.e. from 1st April 2015, overall procurement goal of minimum of20 per cen! shall be made mandatory.

(4) The Central Ministries, Departments and Public Sector Undertakings which filii to meet the annual goal shall substantiate with reasons to the Review Committee headed by Secretary (Micro, Small and Medium Enterprises), constituted in Ministry of Micro, Small and Medium Enterprises, under this Policy.

4. Special provisions for Micro and Small Enterprises owned by Scheduled Castes or Scheduled Tribes. %Out of20 per cent target of annual procurement from Micro and Small Enterprises, a sub-target of20 per cent (i.e., 4 per cent out of20 per cent) shall be earmarked .for procurement from Micro and Small Enterprises owned by the Scheduled Caste or the Scheduled Tribe entrepreneurs. Provided that, in event of failure of such Micro and Small Enterprises to participate in tender process or meet tender requirements and Ll price, 4 per cent sub-target for procurement earmarked for Micro and Small Enterprises owned by Scheduled Caste or Scheduled Tribe entrepreneurs shall be met from other Micro and Small Enterprises.

5. Reporting oftargets in Annual Report. % (I) The data on Government procurements trorn Mic'ro and Small Enterprises is vital for strengthening the Policy and for this purpose, every Central Ministry or Department or Public Sector Undertaking shall report goals set with respect to procurement to be met from Micro and Small Enterprises and achievement made thereto in their respective Annual Reports.

(2) The annual reporting shall facilitate in better understanding of support being provided by different Ministries or Departments or Public Sector Undertaking~;

to Micro and Small Enterprises.

6. Price quotation in tenders. % (I) In tender.

participating Micro and Small Enterprises quoting price within price band ofLI + 15 per cent shall also be allowed to supply a portion of requirement by bringing down thL'ir price to l.l price in a situation where 1.1 pric~~ is from s<nneune other than a M icn.J and Small Enterprise <UHJ such M ICI\) and Small Enterprise shall be allowed lo supply up to .CO per cent oftotal1endcrcd ,,,due.

(2) (n case of :l.ore than one sui.:h Micro and Small Enterprise, the supply shall be shared proportionately (to tendered quant'ity).

7. Developing Micro and Smalll.ntc·rprisc vendor: •.

-The Central Ministries or Departments or Public Sector Undertakings shall take neccssar.;. steps to develop appropriate vendors by organizing Vendor Developmem Programmes or Buyer-Seller Meets and entering into Rate Contract with Micro and Small Enterprises for a specified period in respect of periodic requirements ..

8. ·Annual Plan for Procufement from Micro and Small Enterprises on websites. -The Ministries or Departments or Public Sector Undertakings shall also prepare Annual Procurement Plan for purchases and upload the same on their official website so that Micro and Small Enterprises may get advance information about requirement of procurement agencies.

9. Enhancing participations of Micro and Small Enterprises including those owned by Scheduled Castes or Scheduled Tribes in.Government procurements. % For enhancing participation ofScheduled Castes or Scheduled Tribes in Government procurement, the Central Government Ministries. Departments and Public Sector Undertakings shall take following steps. namely:-

(a) Special· Vendor Development Programmes or Buyer"Seller Meets shall be conducted by Departments/Public Sector Undertakings for Scheduled Castes or Scheduled Tribes;

(b) Outreach programmes shall be conducted by National Smalllndustries CorpOration to· cover more and more Micro and Small Enterprises from Scheduled Castes or Scheduled Tribes under its schemes of consortia formation: and

(c) National Small Industries Corporation shall open a special window for Scheduled Castes or Scheduled Tribes under its Single Point Registration

10. Reduction in transaction cost. % To reduce transaction cost ,of doing buSiness, Micro and Small Enterprises shall be facilitated by providing them tender sets free of cost. exempting Micro and Small Enterprises from payment of earnest money, adopting e-procurement to bring- in transparency in tendering process and setting up a Grievance Cell in the Ministry of Micro. Small and Medium Enterprises.

II. Reservation of specific items for procurement. 0/o TO enable wider dispersal of enterprises_ in the country, particularly in rural areas, the Central Government Ministries or Departments or Public Sector Undertakings shall continue to procure 358 items (Appendix) from Micro and Small Enterprises, which have been reserved for exclusive purchase from them. This will help in promotion and growth of Micro and Small Enterprises. including Khadi and village industries, which play a critical role in fostering inclusive grvwth in the country. ·

12. Review Committee.- ( 1) A Review C11mmittee has been constitut~d undc:r the Chairmanship of Secretary, Mifrisiry of tvlicro, Small and Medium Ente·prises, for monitoring and review of Public Procurement Policy for Micro and Small Enterprises vide Order No. 21(1)12007-

(2) This Committee shall, inter alia, review list of358 items reserved for exclusive purchase from Micro and Small Enterprises on a continuous basis, consider requests of the Central Ministries or Departments or Public Sector Undertakings for exemption from 20 per cent target on a case to case basis and monitor achievements under the Policy.

13. Setting up of Grievance Cell. % In addition, a 'Grievance Cell' will be set up in Ministry of Micro, Small and Medium Enterprises for redressing grievances of Micro and Small Enterprises in Government procurement. This cell shall take up issues related to Government procurement raised by Micro and Small Enterprises with Departments or agencies concerned, including imposition of unreasonable conditions in tenders floated by Government Departments or agencies that put Micro and Small Enterprises at a disadvantage.

14. Special Provisions for Defence Procurements.% Given their unique nature. defence :mnament imports shall not be included in computing 20 per cent goal for Ministry of Defence. In addition, defence equipments like weapon systems, missiles, etc. shall remain out of purview of such Policy of reservation.

15. Monitoring of Goals. %The monitoring of goals set under the Policy shall be done, in so fur as they relate to the Defence sector, by Ministry of Defence itself in accordance with suitable procedures to be established by them.

16. Removal of difficulty. % Any difficulties experienced during the course of implementation of the above Policy shall be clarified by Ministry ofMicro, Small and Medium Enterprises through suitable Press releases which would be kept on the public domain.

AMARENDRA SINHA, Additional Secretary and Development Commissioner (MSME)

ANNEXURE

No. 21(1)12007-MA Government oflndia Ministry ofMicro. Small and Medium Enterprises Office of the Development Commissioner (MSME) 'A' Wing, 7th Floor. Nirman Bhavan.

ORDER

Subject: Constitution of a Committee for monitoring and review of the Public Procurement Policy for Micro and Small Enterprises Pending approval of the new Public Procurement Policy for Micro and Small Eoterprises (MSEs), a Committee is hereby constituted for looking into the applicability of some of the provisions of the proposed Policy in respect of select Central Ministries/Departments .. The Committee will be chaired by the Secretary, Ministry of Micro, Small and Medium Enterprises.

follows:

The composition of the Committee will be as

(i) Secretary, :Chairman Ministry ofMSME Planning Commission Department ofPublic Enterprises (Supplies and Disposals), : Member Department of Commerce,

(vii) Ministry of Commerce and Industry

(viii) Additional Secretary and : Member Secretary Development Commissioner (MSME)

3. The Committee will undertake the following functions:

(i) Consider the requests of the Central Ministrie-s/ Departments/PSUs for exemption, on a case to case basis, !Tom the 20% target;

(ii) Review the list of 358 items (as per Appendix) reserved for exclusive purchase !Tom the MSEs based on the feedback received !Tom the Central Min istries/Departments/PSUs :

(iii) Review the grievances received from MSEs regarding Government procurement, including imposition of unreasonable conditions in the tenders floated by the Government Deparnnents/PSUs; and 1iv) Suggest special measures to be taken by the Central Ministries/Departments for enhancing their procurements from MSEs.

4. The Committee may co-opt any other Ministries/ Departments of the Central Government as well as State Governments or invite any other expert/person associated/ concerned with the MSMEs in its meetings, as and when required.

5. The Office of the Deve:v~P.lent Commissioner (MSME) will provide secretariat support to this Committee.

6. This issues with the approval of the Competent Authority.

( Praveen Mahto) Additional Economic Advtser

APPENDIX

LIST OF ITEM~ RESERVED FOR PURCHASE FROM SMALL SCALE INDUSTRIAL UNrrs INCLUDING HANDICRAFf SECTOR.

Sl No. Item Description I. AAC/and ACSR Conductor upto 19 strands

2. Agricultural implements

(a) Hand Operated tools and implements

(b) Animal driven implements

4. Aluminum builder'shardware

5. Ambulance stretcher upto Class I accuracy)

7. Anklets Weh Kha''

8. Augur (Carpenters)

9. Automobile Head lights Assembly

19. Badges cloth embroidered and metals II. flags of all types i.e. made of leather, cotton. canvas and jute etc. including kit bags. mail bags, sleeping bags and water-proof bag.

12. Bandage cloth

13. Barbed Wire

14. 8asket cane (Procurement can also be made from State Forest Corpn. and State Handicrafts Corporation)

15. flath tubs

16. Battery Charg~r

17. Battery Eliminator

18. Beam Scales (upto 1.5 tons)

19. Belt leather and straps

20. Bench Vices

21. Bituminous Paints

22. Blotting Paper

23. Bolts and Nuts 62. Coir fibre and Coiryarn

24. Bolts Shdong 63. Coir mattress cushions and matting

25. Bone Meal 64. Coir Rope hawserlaid

26. Boot Polish 65. Com1nunity Radio Receivers

27. Boots and Shoes of all types including canvas 66. Conduit pipes shoes 67. Copper nail

28. Bowls 68. Copper Napthenate

29. Boxes Leather (:/}. Copper sulphate

30. Boxes made of metal 70. Cord Twine Maker

31. Braces 71. Cordage Others

32. Brackets other than those used in Railways 72. CooTugated Paper Board and Boxes

33. Brass Wire 73. Cotton Absorbent

34. BriefCases (other than moulded luggage) 74. Cotton Belts

35. Brooms 75. Cotton Carriers "

36. Brushes of all type' 76. Cotton Cases

37. Buckets of all typel< n. Cotton Cord Twine

38. Button of all types 78. Cotton Hosiery

39. Candle Wax Carriage 79. Cotton Packs

40. Cane Valves/stock ·;alves (for water fittings only) 80. Cotton Pouches

41. Cans metallic (for milk and measuring) 81. Cotton Ropes

42. Canvas Products : 82. Cotton Singlets

(a) Water ProofDeliver, Bags to spec. No. IS- 1422/ 83. Cotton Sling

84. Cotton Straps

(b) Bonnet Covers and Radiators Muff. to spec.

85. Cotton tapes and laces

43. Capes Cotton and Woollen

86. Cotton Wool (Non absorbent) 'If/. Crates Wooden and plastic

44. Capes Waterproof

88. (a) Crucibles upto No. 200

45. Castor Oil

46. Ceiling roses upto IS amps

(b) Crucibles Graphite upto No. 500

47. Centrifugal steel plate blowers &9. Cumblies and blankets

48. Centrifugal Pumps suction and delivery 150 mm. x

50. Chains lashing 92. Dibutyl phthalate

51. Chappals and sandals 93. Diesel engines upto 15 H.P 52 Chamois Leather 94. Dimethyl Phthalate .

53. Chokes for light fitting 95. Disinfectant Fluids

54. Chrome Tanned leather(Semi-finished Buffalo and 96. Distribution Board upto 15 amps Cow) 97. Domestic Electric appliances as per B1S

55. Circlips Specifications:-

56. Claw Bars and Wires - Toaster Electric, Elect. Iron, Hot Plates, Elect. Mixer,

57. Cleaning Powder Grinders, Room heaters and convectors and ovens

98. Domestic (House Wiring) P.V.C. Cables and Wires

58. Clinical Thermometers (Aluminum) Conforming to the prescribed BlS

59. Cloth Covers Specifications and upto 10.00 mm sq. nominal cross

60. Cloth Jaconet section

61. Cloth Sponge 99. Drawing and Mathematical Instruments

100. Drums and Barrels 139. Hand pounded Rice (polished and unpolished)

101. Dust Bins 140. Hand presses

102. Dust Shield leather 141. Hand Pump

103. Dusters Cotton all types except the items required 142. Hand Tools of all types inKhadi 143. Handles wooden and bamboo (Procurement can

104. Dyes: also be made from State Forest Corpn. and State

(a) Am Dyes (Direct and Acid) Handicrafts Corporation) '(b) Basic Dyes 144. Harness Leather

105. Electric Call bells/buzzers/door bells 145. Hasps and Staples

106. Electric Soldering Iron 146. Haver Sacks

107. Electric Transmission Line Hardware items like steel 147. Helmet Non-Metallic cross bars, cross arms clamps arching horn, 148. Hide and country leather of all types brackets, etc 149. Hinges

108. Electronic door bell !50. Hobnails ,.

109. Emergency Light (Rechargeable type) 151. Holdall liO. Enamel Wares and Enamel Utensils 152. Honey lll. Equipment camouflage Bamboo support 153. Horse and Mule Shoes

112. Exhaust Muffler 154. Hydraulic Jacks below 30 ton capacity I 13. Expanded Metal 155. Insecticides Dust and Sprayers (Manual only)

114. Eyelets 156. Invalid wheeled chairs.

ll5. Film Polythene- including wide width film 157. Invertor domestic type upto 5 KVA ll6. Film spools and cans 158. Iron ( dhobi) I 17. Fire Extinguishers (wall type) 159. Key board wooden

118. Foot Powder 160. Kit Boxes

119. French polish 161. Kodali

120. Funnels 162. Lace leather

121. Fuse Cut outs 163. Lamp holders

122. Fuse Unit 164. Lamp signal

123. Ganments (excluding supply from Indian Ordnance 165. Lanterns Posts and bodies Factories)

166. Lanyard

124. Gas mantels

167. Latex foam sponge

125. Gauze cloth

168. Lathies

126. Gauze surgical all types

169. Letter Boxes

127. Ghamellas (Tasllas)

170. Lighting Arresters - upto 22 kv

128. Glass Ampules

171. Link Clip

129. Glass and Pressed Wares

172. Linseed Oil l30. Glue

173. Lint Plain 13!. Grease Nipples and Grease guns

174. Lockers

132. Gun cases

175. Lubricators

133. Gun Metal Bushes

134. Gum tape

177. Machine Screws

135. Hand drawn carts of all types

178. Magnesium Sulphate

136. Hand gloves of all types 179 Mallet Wooden

137. Hand Lamps Railways

180. Manhole covers !38. Hand numbering machine ·.:. 181. Measuring Tapes and Sticks

182. Metal clad switches (upto 30 Amps) 223. PVC pipes upto 110 mm

184. Metallic containers and drums other than N.E.C. (ISS:694) (Not elsewhere classified) 225. Quilts, Razais

185. Metric weights 226. Rags 1&6. Microscope for normal medical use 227. Railway Carriage light fittings IS- Miniature bulbs (for torches only) 228. Rakes Ballast 140 Naphthalene Balls 231. RCC Poles Prestressed

191. Newar 232. Rivets of all types

192. Nickel Sulphate 233. Rolling Shutters

193. Nylon Stocking 234. Rooflight Fittings

194. N y ion Tapes and Laces 235. Rubber Balloons

195. Oil Bound Distemper 236. Rubber Cord ·~· t96. Oil Stoves (Wick stoves only) 237. Rubber Hoses (Unbranded)

197. Pad locks of all types 238. Rubber Tubing (Excluding braided tubing) ·-

198. Paint remover 239. Rubberised Garments Cap and Caps etc

199. Palma Rosa Oil 240. Rust/Scale Removing composition

200. Palmgur 241. Safe meat and milk

201. Pans Lavatory Flush 242. Safety matches

202. Paper conversion products- paper bags, envelops, 243. Safety Pins (and other similar products like paper Ice-cream cup, paper cup and saucer~ and paper pins, staples pins etc.) Plates 244. Sanitary Plumbing fittings

203. Paper Tapes (Gummed) 245. Sanitary Towels

204. Pappads 246. Scientific Laboratory glass wares (Barring

205. Pickles and Chutney sophisticated items)

206. Piles fubric 247. Scissors cutting (ordinary)

207. Pillows 248. Screws of all types including High Tensile

208. Plaster of Paris 249. Sheep skin all types

209. Plastic Blow Moulded Containers upto 20 litre 250. Shellac excluding Poly Ethylene Terphthalate (PET) 251. Shoe laces Containers

252. Shovels 2!0. Plastic cane

253. Sign Boards painted

211. Playing Cards

254. Silk ribbon

212. Plugs and Sockets electric upto 15 Amp

255. Silk Webbing :

256 Skibnots and shoes

214. Polythene Pipes

257. Sluice Valves

215. Post Picket (Wooden)

258. Snapfastner (Excluding 4 pes. ones) y

216. Postal Lead seals

259. Soap Carbolic

217. Potassium Nitrate

260. Soap Curd

218. Pouches

261. Soap Liquid

219. Pressure Die Casting upto 0. 75 kg

262. Soap Soft

220. Privy Pans

263. Soap washing or laundary soap

721. Pulley Wire 264. Soap Yellow 222 PVC footwears ['IWTII =3(ii)]

266. Sodium Nitrate

267. Sodium Silicate

268. Sole leather

269. Spectacle frames

270. Spiked boot

271. Sports shoes made out of leather (for all Sports games)

272. Squirrel Cage Induction Motors upto and including

273. Stapling machine

274. Steel Almirah

275. Steel beds stead

276. Steel Chair

277. Steel desks

278. Steel racks/shelf

279. Steel stools

280. Steel trunks

281. Steel wool "81 Steel and aluminium windows and ventilators 2:;.1 Stone and stone quarry rollers 287 Street light fittings

288. Student Microscope

289. Studs (excludine high tensile)

290. Surgical Gloves (Except Plastic)

291. Table knives (Excluding Cutlety)

292. Tack Metailic

293. Taps

294. Tarpaulins

295. Teak fabricated round blocks 2%. Tent Poles

297. Tentage Civil/Military and Salitah Jute for Tentage

298. Textiles manufactures other than N.E.C. (not elsewhere classified)

299. Tiles

300. Tin Boxes for postage stamp

301. Tin can unprinted upto 4 gallons capacity (other

302. Tin Mess

303. T1p Rnots

304. T<>~ele Switches

306. Transformer type welding sets conforming to JS:J291/75(upto600 amps)

307. Transistor Radio upto 3 band

308. Transistorised Insulation - Testers

309. Trays

310. Trays for postal use

311. Trolley

312. Trollies- drinking water

313. Tubular Poles

314. l)tres and Tubes (Cycles)

315. Umbrellas

316. Utensils all types

317. Valves Metallic

318. Varnish Black Japan

320. Washers all types

321. Water Proof Covers

322. Water Proof paper

323. Water tanks upto 15,000 litres capacity

324. Wax sealing

325. Waxed paper

326. Weighing Scale

327. Welded Wiremash

328. Wheel barrows

329. Whistle

330. Wicks cotton

331. Wing Shield Wipers (Anns and hJades only)

332. Wire brushes and Fibre Brushes

333. Wire Fencing and Fittings

334. Wire nails and Horse shoe nails

335. Wire nettings of gauze thicker than I 00 mesh size

336. Wood Wool

337. Wooden ammunition boxes

338. Wooden Boards

339. Wooden Box for Stamps

340. Wooden Boxes and Cases N.E.C. (Not elsewhere classified)

341. Wooden Chairs

342. Wooden Flush Door Shutters

343. Wooden packing cases all sizes

344. Wooden pins

345. Wooden plugs

346. Wooden shelves

347. Wooden veneers

348. Woollen hosiery

349. Zinc Sulphate

350. Zip Fasteners HANDICRAFT ITEMS 354. Wooden paper Item Description Source of Supply weight, racks etc. -do- Cane furniture North Eastern

355. Glass covers made -do- Hand looms Handicrafts and and grass jute of Development Corporation wood Assam Govt. Marketing Corpn. Craft Society of 356. Jute furniture West Bengal Handicrafts Handicrafts and Development Corporation Handlooms Development Orissa State Handicrafts Corpn. Dev.Corpn.

Bamboo file tray, -do-

357. Jute bags, -do- Baskets, Pencil file cover stand, side racks etc.

Artistic Wooden Rajasthan Small Industries 358. Woolen and U.P. Export Corporation Furniture Corpn., U.P. Export silk carpets JandK Sale and Export Corporation. Corporation P11nted by the Manager. Government of India Press. Ring RP.,d Mayapun New Oelhi-IIOOb-1 and PuhJished by the Controller of Puhll~~t!.Jn:o .. !)clhJ-110054 Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24

Other instruments under the same Act

All of the The Micro, Small and Medium Enterprises Development Act, 2006