New Delhi, May 17 (KNN) Public Procurement Policy is an initiative to boost the employment generating MSME sector largely through mandatory Central PSUs. Under the policy the PSUs have to mandatorily procure atleast 20 per cent of the goods/ services from the MSEs.

Earlier the issues of less procurement by PSUs, delayed payments, substandard qualities etc were brought out by both sides.

“But what if the tenders are tweaked in such a way that the MSEs don’t even fall under the ambit of being eligible for it?” ask the MSME entrepreneurs who have missed out huge opportunities due to adoption of dubious tactics by Railways.

HS Chopra, Director, Data Technosys(Engineers) Pvt. Ltd  pointed that a tender notice for some Survey Work for railway was invited by Chief Administrative Officer/Con /N.E. Railway/Gorakhpur vide Open tender notice No. CAO/Con/34/2014.

In this tender in all there were 5 items out of which item Number 3 to 5 were related to SURVEY – i.e. ‘SERVICE SECTOR’ in terms of MSME classification, but clubbed with other to items which are for Civil Works and may not come under the purview of procurement policy.

Due to the crafty clubbing, entire tender was claimed to be beyond the provision of “Public Procurement Policy for goods produced and services rendered by Micro and Small Enterprises (MSEs) by Central Ministries/Departments/Public Sector Undertakings (PSUs).”

“We raised this issue with  Chief Administrative Officer/Con /N.E. Railway/Gorakhpur (Annexure No-2) with request to amend the same to accommodate MSME as per Government policy,” Chopra told KNN adding that their request was turned down on the ground that the tenders are not for Service’ but are for  ‘Civil work in field’.

The MSME entrepreneur pointed that a CBEC Circular gives list of the services on which Service Tax is payable and Sl no 5,25,73 & 100 of this list covers the basic scope of work of this tender against which as per Service Tax requirement they have to pay service tax.

“Thus on one hand because of one of the Government policy we were to pay service tax to government for this particular tender, and on other hand the department was claiming this not to be a work of ‘SERVICE‘ sector just to ignore and avoid our claim as MSME,” Chopra cried.

Furthermore, Chopra raised the complaint with different departments and Ministries on this.

“We sent a letter to MSME Minister, DC MSME, MSME Secretary, Chief Vigilance Commissioner, Chairman Railway Board to which we got a response from CVC that our complaint have been entertained and has been forwarded to Kundan Sinha, Advisor ( Vigilance), Railway Board for necessary action.”

A letter was even sent from from the office of Development Commissioner MSME a letter was sent to NER Gorakhpur on However on March 19, 2015.

“The matter is till date not brought to any logical end, so far as my knowledge goes. We are also to run our business and can only afford a reasonable efforts and time to devote in such actions to fight for our right. The lackadaisical attitude of the officers / ministries / CVC / and all such high crowned posts also makes you realize that nothing is going to happen as all these Government Policies are nothing but just show up icing on a wooden cake which you can appreciate but can’t eat,” Chopra cried.

Another entrepreneur Sandeep Saxena told KNN that he too had a similar experience with the Railways.

Saxena raised the complaint against RVNL, an Indian Railway Subsidiary, with the DC-MSME for ignoring the small players in its tenders.

“In lot of tenders floated by RVNL for PMC contracts, it is observed that in the bidding document the selection process is being fixed in a manner to favor exclusively big consultant and screen out the smaller consultant,” Saxena pointed.

The provision of 20% procurement of products produced and services rendered by MSEs has been made mandatory from 1 April 2015 for central ministries/departments/PSUs.

According to a report, procurement of approximately Rs.14,442 crore, Rs.12,931 crore and Rs.3,799 crore was made from MSEs by central ministries/departments/ PSUs in 2011-12, 2012-13 and 2013-14, respectively. (KNN Bureau)