MICRO SMALL AND MEDIUM

ENTERPRISES
Group 7
Anup Kumar Rathi

Hema Prabha.S

Himani Sharma

Manish Gupta

Shivam Rastogi

Shruti Shrinivas

Vijayendra Rao

Vishal Singh


Contribution of MSMEs
 Summary
vMinistry of MSME has recommended at least
20% of public procurement should be
from MSMEs
v3.5% of public procurements are from
MSMEs
v

 Concerns for MSMEs
vAdditional Investments and Capacity
Expansion
vFrequently changing requirements
vDelayed waiver payments
Concerns for government
vQuality of supplies
vFormation of Cartels
FOCUS OF THE ARTICLE
Benefits of doing business with the
Government

Level of preparedness exhibited by MSME’s

Various associated hiccups
Government’s Stand

Increase in Quality

Transparency in procurement process

E-procurement schemes


Relevance of the case in MSME
financing
The case has thrown light on following


important issues


Delayed payment from PSUs


Slow refunding process

Increased threshold amount for bidding
Current Issues w.r.t MSME
financing
Inadequacy of working capital


Difficulties in repaying term loans as well

as interests due to slowdown in economy


Access to funds for new projects/start ups



High cost of credit and dominance of

unorganized sector in financing
Reasons that lead to the 20 %
ordinance
ØReduced Production in MSMEs
ØRisk aversion by banks
ØCurrent level of government purchases from
MSMEs

Benefits to MSMEs by way of this

ordinance
ØIncreased supplier base
ØAssured government payment
ØEase to get advances
ØIncreased investment
Precautionary steps to realize the
potential of Public Procurement

ØE-procurement system
ØNo unrealistic entry barriers to MSMEs

THANK YOU