E-Market Opportunities For MSME In Government
The Micro Small and Medium Enterprises (MSMEs) sector is a key contributor to the socioeconomic development of India. This sector contributes ~29% towards the Indian GDP through its domestic and international trade. It comprises ~6.3 crore MSMEs and the number of registered MSMEs increased 18.5% Y-o-Y to reach 25.13 lakh (2.5 million) units in 2020 from 21.21 lakh (2.1 million) units in 2019.
In order to double the country’s economy to US$ 5 trillion in five years and to achieve this goal, the aim is to enhance MSME’s share in exports and its contribution to the GDP. In addition, in FY22, the government increased (by 2x) MSMEs budget to Rs. 15,700 crore (US$ 2.14 billion) vis-à-vis Rs. 7,572 crore (US$ 1.03 billion) in FY21.
Since 2014, the government has been introducing initiatives such as Digital India, Make in India, Start-up India, Skill India and Innovation Fund to accelerate e-commerce in India. It is also encouraging MSMEs to market their products on e-commerce sites, especially on the government-owned websites, such as e-Marketplace (GeM), which is used by Ministries and PSUs (public sector undertakings) to procure materials.
As part of the Digital India initiative, the Ministry of MSME undertook numerous initiatives to digitise the entire MSME ecosystem, wherein all offices have been digitally empowered, efforts have been taken to spread awareness on benefits of digital payment solutions such as BHIM, UPI and Bharat QR code.
The benefits extended to MSMEs include tender sets free of cost, exempt from Earnest Money (EMD), purchase preferences of minimum 25 percent to MSEs with the lowest (L1) bidder. Moreover, 358 items are exclusively reserved for MSEs.
All the sellers claiming to be MSE are required to validate their MSE status through Udyog Aadhar. The micro and small enterprises are exempted from EMD, if MSE is a manufacturer of primary product category or service provider of primary service category and gives specific confirmation to this effect at the time of bid submission and whose credentials are validated online through Udyog Adhaar and through uploaded supporting documents. MSE is registered with NSIC and DIC for primary product category whose credentials are validated through NSIC/ DIC database and through uploaded supporting documents.
The MSEs are also exempted from EMD, provided the buyer has been given the option to exempt the MSEs from turnover and past experience criteria at the time of creation of the bid as provided for in PPP-MSE order. Further, suitable ATC clauses are already enabled for ensuring compliance of PPP-MSE orders.
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