Chapter: National Issues

Topic: The Private Sector’s Turn To Deliver

Q. What are the highlights of new Procurement Policy?

• The Central government has finally announced a policy reserving 20 per cent of its purchases for micro and small enterprises run by entrepreneurs belonging to the Scheduled Castes and the Scheduled Tribes.

• The new procurement policy will cover 358 items to be purchased by Central ministries, departments and public sector undertakings. The 20 per cent purchase norm will become mandatory after three years.

• The corporate sector has developed affirmative action policies on a voluntary basis and adopted a code of conduct; entrepreneurship development is one of the components of this policy. Associations of industries have recognised the role of market support for success in integrating marginalised communities in mainstream industry.

• CII, Assocham, and FICCI, whose membership runs into thousands of companies, are way behind in accepting the market support policy in purchases from SC and ST vendors.

• The government’s initiative on procurement, if accepted by the private sector on a wider scale, has the potential to make growth pro-poor and inclusive.

Q. What are the limitations of new Procurement Policy?

• The policy does have its limitations as procurement under the policy will cover only purchases made by Central ministries, departments and PSUs.
• Public enterprises account for only 5 per cent of the total enterprises in India. The remaining 95 per cent, private enterprises, are without any such obligation.

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