The BHEL Small Industries Association (BHELSIA) is exploring the scope for a cluster-based approach to derive utility of the MSME-friendly Defence Acquisition Procedure 2020, and, in the process, enable revival of sick units.
The economic support package of the Central Government for micro, small and medium enterprises disallows global tender for government procurement up to ₹200 crore. The BHELSIA believes that consideration of clusters as units will pave way for fulfilling the turnover eligibility of the MSME sector in the region in order to be in the reckoning for catering to the Defence sector.
“There are strong signs of revival of MSME sector in Tiruchi region. The progress could be leveraged further by securing orders from Defence equipment manufacturers on a cluster basis,” BHELSIA president Rajappa Rajkumar said, making a case for a joint effort by the Central and State Governments for activating MSME units categorised as ‘sick’ over the last few years.
So far, at least 35 units have been categorised as sick, and, of them, up to 25 could be revived if the intended purpose is served by the State Government through conduct of the meeting of State Level Bankers Committee shortly, Mr. Rajappa Rajkumar said. The utility of reviving the struggling MSME units that have already created huge capacity and developed expertise will be far higher than fostering new units, he pointed out, adding that the BHEL’s ancilliary units had a high degree of capability for catering to the defence sector.
The scheme for promotion of MSMEs is being executed by the Department of Defence Production, Ministry of Defence, since 2019, under the Make in India initiative of the Central Government with the key objective of bringing the sector into the defence supply chain and thereby boost the self-reliance of the country in defence.
Under the scheme, the Department provides know-how to Indian MSMEs active in non-defence sectors for their entry in the defence sector through workshops and conclaves. MSME vendors will be imparted awareness and information about opportunities emanating out of the Defence Procurement Procedure, and more specifically out of the new Make II procedure before linkage with Original Equipment Manufacturers, and Defence Public Sector Undertakings.
According to Defence Ministry figures, procurement by DPSUs/ erstwhile OFB from MSMEs was ₹5,463 crore during 2020-21.
