Kassia seeks 15% purchase and price preference for SMEs

Karnataka Small Scale Industries Association (Kassia) has urged the State Government to adopt 15 per cent purchase and price preference in its procurement policy.

Kassia, represented by its president A. Vijayendranath, in a pre-budget discussion with Chief Minister Jagdish Shettar and government officials said that as per the industrial policy, the small industries are to be given both purchase preference and 15 per cent price preference in order to be competitive when compared with large and medium enterprises.

“Some of the corporations such as KSRTC adopted a policy where the SMEs were asked to match L-1 rates of large industry. Whereas some corporations paid 15 per cent higher price to the SME supplier,” he said.

Due to this ambiguity in the procedure adopted by each department in the 15 per cent price preference, this policy for the government corporations and public undertakings has been withdrawn and at present no SME can supply materials to any of the government undertakings.

“Therefore, we request you to reinstate the 15 per cent price and purchase preference and prescribe a procedure as in the case of KSRTC, where if the SME supplier is ready to match L-1 price of large manufacturer, he should be given preference,” said Vijayendranath.

The State Government should formulate a procurement policy which will be applicable to all departments, autonomous bodies and local bodies up to panchayat level, he added.

“Every department is having a purchase committee to implement its purchase programme. It is suggested that one representative of Kassia may be inducted as a member in each departmental purchase committee to serve as a spokesmen of the small industries in order to highlight the procurement policy content at the decision making stage and monitor its progress,” Vijayendranath suggested.

The State’s Procurement Policy should explicitly recognize the role of the decentralized small scale sector which is contributing significantly to the share of states manufacture, employment and exports. A fair share of minimum 30 per cent of the governments requirement should be reserved for the SSI sector.

As for other suggestions, Kassia said government should give interest subsidy for technology upgradation. “The government thoughtfully introduced a scheme of extending 4 per cent interest subsidy sometime back in order to encourage modernization and technology up gradation by funding capital equipments. This scheme was discontinued subsequently. In the present competitive era and globalization challenges and in the context of higher rate of interest charged by the banks, it is requested that this scheme may be restored to all funding by nationalized banks and KSFC for purchase of updated machinery to speed up the modernization process in the State,” Kassia said.

anil.u@thehindu.co.in

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