Government of India has introduced a Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 which is notified under MSMED Act 2006. Under the Policy, every Central Government Ministries, Departments, and Public Sector Undertakings shall procure a minimum of 25% of their total annual value of goods or services from Micro and Small Enterprises including 4% of total procurement of goods and services from Micro and Small Enterprises owned by SC & ST entrepreneurs and 3% of total procurement of goods and services from Micro and Small Enterprises owned by women entrepreneurs.
The Public Procurement Policy applies to Micro and Small Enterprises registered with District Industries Centers or Khadi and Village Industries Commission or Khadi and Village Industries Board or Coir Board or National Small Industries Corporation or Directorate of Handicrafts and Handloom or any other body specified by Ministry of MSME.
The policy rests upon core principles of competitiveness, adhering to sound procurement practices and execution of orders for supply of goods or services in accordance with a system which is fair, equitable, transparent, competitive and cost effective.