DGS&D's 'green channel' move leaves MSMEs red
Updated: Sep 20, 2013 06:23:08pm
New Delhi, Sept 20 (KNN) The Director General of Supplies and Disposal (DGS&D), the largest central buying agency of the Government of India, has introduced a 'Green Channel' for suppliers having an annual turnover of Rs 1000 crore leaving MSMEs unamused.
The ‘Green Channel’ policy allows waiver in registration and pre–dispatch inspection for supplies through DGS&D rate contract through which the supplied items will be accepted against the firm’s / OEM’s Guaranty / Warranty. The threshold limit for eligibility under the Green Channel for any supplier has been mentioned at an average annual turnover of Rs 1000 crore during the previous 3 years and making profit in any 3 out of the last 5 years.
As large and small companies compete in government tenders, the Green Channel policy may provide an unfair advantage to large companies as the latter will save on the cost associated with DGS&D registration and third party testing often required for pre dispatch by DGS&D.
“The policy is most unsafe. Just because a company has a turnover does not mean it has expertise in every field. For instance, if a company has expertise in textiles, it will not be competent to supply electronic items,” said Managing Director, Instapower Ltd, Himangshu R Vaish.
“The policy favours multinationals and large organisations at the cost of the SME sector which largely contributes to employment and exports,” added Vaish who is also the President of Chamber of Industries of Udyog Vihar.
The focus of past policies according to him has been on getting FDI into the country and getting foreign remittance into the financial sector. “Investors can at any time pull back their money which weakens our rupee as we have seen in the recent past,” he warns.
To strengthen our currency and to take care of balance of payment position, we need to focus on increasing exports, like China.
Vaish is also of the opinion that there should be increased focus on import substitution. “We are importing liberally. But why should we import what can be produced by the small sector within the country?” he asked.
In this respect, SMEs must be given an advantage rather than a disadvantage such as the green channel policy. The government policy of 20 per cent purchase from SME sector should be reinforced by positive enactments rather than such negative ones, he said.
Echoing the same sentiments, Federation of Indian Micro and Small & Medium Enterprises (FISME) has also said that linking the green channel eligibility with turnover, profitability may not be appropriate. Instead, the facility should be offered to suppliers with proven / certified Quality systems / Quality Assurance mechanism irrespective of size. (KNN/AB/ES)
The ‘Green Channel’ policy allows waiver in registration and pre–dispatch inspection for supplies through DGS&D rate contract through which the supplied items will be accepted against the firm’s / OEM’s Guaranty / Warranty. The threshold limit for eligibility under the Green Channel for any supplier has been mentioned at an average annual turnover of Rs 1000 crore during the previous 3 years and making profit in any 3 out of the last 5 years.
As large and small companies compete in government tenders, the Green Channel policy may provide an unfair advantage to large companies as the latter will save on the cost associated with DGS&D registration and third party testing often required for pre dispatch by DGS&D.
“The policy is most unsafe. Just because a company has a turnover does not mean it has expertise in every field. For instance, if a company has expertise in textiles, it will not be competent to supply electronic items,” said Managing Director, Instapower Ltd, Himangshu R Vaish.
“The policy favours multinationals and large organisations at the cost of the SME sector which largely contributes to employment and exports,” added Vaish who is also the President of Chamber of Industries of Udyog Vihar.
The focus of past policies according to him has been on getting FDI into the country and getting foreign remittance into the financial sector. “Investors can at any time pull back their money which weakens our rupee as we have seen in the recent past,” he warns.
To strengthen our currency and to take care of balance of payment position, we need to focus on increasing exports, like China.
Vaish is also of the opinion that there should be increased focus on import substitution. “We are importing liberally. But why should we import what can be produced by the small sector within the country?” he asked.
In this respect, SMEs must be given an advantage rather than a disadvantage such as the green channel policy. The government policy of 20 per cent purchase from SME sector should be reinforced by positive enactments rather than such negative ones, he said.
Echoing the same sentiments, Federation of Indian Micro and Small & Medium Enterprises (FISME) has also said that linking the green channel eligibility with turnover, profitability may not be appropriate. Instead, the facility should be offered to suppliers with proven / certified Quality systems / Quality Assurance mechanism irrespective of size. (KNN/AB/ES)
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