New Delhi—Under the Central Government’s Public Procurement Policy, the statutory target of procuring a minimum of 4 percent of goods and services from Micro and Small Enterprises (MSEs) owned by Scheduled Castes (SC) and Scheduled Tribes (ST) has, even after nine years, reached only 1.79 percent.
This revelation emerged in a written response to Starred Question No. 171 in the Rajya Sabha on March 9. Lok Sabha MP Prof. Varsha Eknath Gaikwad (Mumbai North-Central) wrote to President Droupadi Murmu, appealing for immediate intervention regarding the “inconsistent and neglected” implementation of the policy.
What Questions Were Asked in the Rajya Sabha, and What Answers Were Received?
MP Golla Baburao asked the Minister of Micro, Small and Medium Enterprises: What are the objectives of the National SC/ST Hub Scheme currently being implemented for Scheduled Caste/Scheduled Tribe entrepreneurs?
Is it not true that the government has mandated a 4 percent procurement from SC/ST-owned Micro and Small Enterprises under the Public Procurement Policy for MSEs? And (c) if so, what is the percentage of procurement made from SC/ST enterprises since the implementation of the mandatory 4 percent procurement clause—specifically in the context of the state of Andhra Pradesh?
Responding to the question in the Rajya Sabha, the Minister of Micro, Small and Medium Enterprises (MSME), Jitan Ram Manjhi, clarified:
(a) Objective of the National SC/ST Hub (NSSH) Scheme: Operational since October 2016, the scheme aims to promote SC/ST entrepreneurship and to facilitate the fulfillment of the mandatory 4% procurement target from MSEs under the Public Procurement Policy.
(b) Confirmation of the 4% Target: Yes, under the Public Procurement Policy for MSEs Order, 2012, it is mandatory for all Central Government Ministries, Departments, and Central Public Sector Enterprises (CPSEs) to procure 25% of their total annual purchases from MSEs, and—within that allocation—4% specifically from SC/ST-owned MSEs.
(c) Actual Figures: According to data recorded on the MSME Sambandh Portal (launched on December 8, 2017), the percentage of procurement from SC/ST-owned MSEs across the country has been as follows (as of March 5, 2026):
Minister Jitan Ram Manjhi stated in the Rajya Sabha that the NSSH scheme has been operational since 2016 specifically to fulfill this 4% target. Nevertheless, the figures indicate that despite rising from ₹544 crore in 2017-18 to ₹3,364 crore in 2025-26, the actual percentage achieved remains far short of the stipulated target.
The Minister also acknowledged that data is not maintained on a state-wise basis; therefore, separate data specifically for Andhra Pradesh is not available.
What are the Government Regulations?
(Public Procurement Policy, 2012)
Procurement of 25% of total purchases from MSEs is mandatory.
Within that, 4% must be procured from SC/ST-owned MSEs (constituting 4% of the *total* procurement value, not merely 4% of the 25% MSE quota).
3% must be procured from women-owned MSEs.
Definition of an SC/ST-owned MSE: In a proprietorship, the owner must belong to the SC/ST category; in a partnership, SC/ST members must hold a 51% stake; or in a company, SC/ST members must hold 51% of the promoter shares.
Provision for free tender forms, exemption from Earnest Money Deposit (EMD), reservation of 358 specific items for procurement, and mandatory Vendor Development Programs.
The central policy mandates that a minimum of 10 percent of the total value of government procurement and tenders must be sourced from SC/ST entrepreneurs.
How are these regulations being disregarded? Responses provided in the Rajya Sabha, along with data from the MSME Samadbandh portal, clearly demonstrate that over a period of nine years, the percentage has risen from a mere 0.48% to just 1.79%. In other words, not even 55% of the 4% target has been achieved. While many CPSEs (Central Public Sector Enterprises) and ministries successfully meet the 25% target for MSEs (Micro and Small Enterprises), they frequently overlook the sub-target specifically designated for SC/ST entrepreneurs. The reasons for this include:
- A lack of capacity building and market access for SC/ST entrepreneurs.
- The failure of certain departments to include SC/ST categories in tender documents, or their refusal to accord priority even when an L1 (lowest bid) is received from such entities.
- A tendency among state governments to either not fully adopt or not effectively implement the Central government’s policy.
- A lack of effective oversight and monitoring.
Addressing this very issue of neglect, Prof. Varsha Gaikwad stated in a letter addressed to the President on March 24: “The Central policy mandates that a minimum of 10 percent of the total value of government procurement and tenders must be sourced from SC/ST entrepreneurs. This policy was formulated with the objective of fostering inclusive economic growth, encouraging entrepreneurship among marginalized communities, and ensuring their equal participation in national development. However, at the state level, this policy is being implemented inconsistently—and, in most instances, is being completely disregarded.
Consequently, SC/ST entrepreneurs are being denied their rightful entitlements, and the broader objectives of socio-economic empowerment remain unfulfilled.” She urged the President to issue strict directives to all Central ministries, departments, and state governments to ensure the uniform and equitable implementation of this policy. Furthermore, she called for the establishment of robust monitoring mechanisms, the creation of awareness among procurement officials, and the launch of capacity-building programs specifically tailored for SC/ST entrepreneurs.
Geetha Sunil Pillai
Courtesy: Hindi News