Strengthening Inclusive Procurement: Addressing Implementation Gaps in SC/ST MSE Policy

The Ministry of MSME recently convened a high-level round table with Central Public Sector Enterprises (CPSEs) to conduct a performance audit of the Public Procurement Policy. The core of this discussion centers on the statutory requirement for CPSEs to source at least 4% of their total annual procurement from Micro and Small Enterprises (MSEs) owned by entrepreneurs belonging to the Scheduled Caste (SC) and Scheduled Tribe (ST) communities.

While this policy is a cornerstone of India’s social and economic empowerment strategy, achieving the mandated target remains a persistent challenge. Data consistently indicates that despite legal safeguards and policy interventions, CPSEs struggle to identify qualified SC/ST-owned vendors or integrate them effectively into their supply chains. The round table served as a critical platform to identify systemic bottlenecks, such as information asymmetry, technical certification barriers, and the need for more robust vendor registration systems on the Public Procurement portal (GeM).

From a governance perspective, this review is essential to bridge the gap between policy intent and ground-level execution. By fostering dialogue between the government and public sector stakeholders, the Ministry aims to move beyond mere compliance metrics toward sustainable economic inclusion. Enhancing the participation of marginalized entrepreneurs in public procurement is not only a matter of social justice but a vital step toward creating a more competitive and inclusive manufacturing ecosystem under the 'Make in India' initiative. Ensuring that these MSMEs receive their fair share of public contracts acts as a catalyst for local economic development and helps address structural inequalities in the industrial landscape.