MSEs have overshot the 25% public procurement target, yet the SC/ST sub-target is persistently missed. Analyse the reasons and suggest remedies.

The Public Procurement Policy for MSEs Order, 2012 requires central ministries, departments and CPSEs to buy 25% of their annual procurement from MSEs. Within that, 4% must come from SC/ST-owned MSEs and 3% from women-owned MSEs [1]. MSE purchases reached 43.58% in 2024-25, while the SC/ST share stayed below 2% [2][3]. The overall target is being met, but the SC/ST share it was meant to include is not.

Reasons for the gap

• No buyer is held responsible: compliance is counted for central procurement as a whole. A CPSE that buys little from SC/ST firms faces no specific penalty [4].
• The overall figure hides the shortfall: established MSEs alone can take the headline share well past 25%, so missing the sub-target has no separate consequence.
• Too few ready suppliers: the Ministry still has to run awareness drives through the National SC-ST Hub [5]. This suggests many eligible firms are not yet registered or ready to bid.
• Finance hurts first-generation firms most: about ₹8.1 lakh crore is locked in delayed payments to MSMEs [4]. Firms with thin capital and little collateral are hit hardest.
• Reforms apply equally to all sellers: GeM's lower transaction charges and the abolition of Caution Money help every seller in the same way [6]. They make entry cheaper but do not direct orders to SC/ST firms.
• Poor data: the MSME Sambandh portal is not yet integrated with GeM. Shortfalls show up in year-end returns, not in live data [4].

Remedies

• Hold each buyer accountable: set CPSE-wise annual sub-targets, make shortfalls public, and link penalties to each CPSE's MoU [4].
• Track it in real time: integrate Sambandh with GeM within a fixed deadline and build a national vendor directory, so sub-targets are tracked from live order data [4].
• Help firms get onto GeM: scale up the SC-ST Hub's support, together with Laghu Udyog Bharati's help counters for sellers with low digital skills [5][6].
• Make credit easier to get: give SC/ST sellers priority for GeM SAHAY collateral-free loans against purchase orders [6].
• Make buyers pay on time: link GeM with Samadhaan/ODR so delayed payments are flagged automatically [4].

The 43.58% figure shows that public procurement can drive MSE growth. The SC/ST gap shows that a high overall share does not mean the benefits are fairly spread. Moving from aggregate targets to buyer-level accountability, backed by integrated data and targeted support, can make GeM inclusive. This would fulfil Article 46's directive to promote the economic interests of SCs and STs and advance SDG 10 (reduced inequalities).