FISME & SIDBI lay track to accelerate MSME procurement in Railways. RDSO will work with SIDBI and FISME to lay faster track for MSME suppliers!
NEW DELHI: Small Industries Development Bank of India (SIDBI), the nodal bank for micro, small and medium industries in India has joined hand with FISME, the apex federation for MSMEs, to introduce MSMEs in railways supplies. Research, Development and Standards Organisation (RDSO) the premier R&D organisation of Indian Railways is working with SIDBI to facilitate supplies by MSMEs to Railways.
The first programme will be held in Lucknow on 22ndAugust, 2017 in association with RDSO, Railways. FISME, the lead federation of Indian MSMEs, will provide the back end support for the programme. The programme will be launched at the New Auditorium of RDSO at Manak Bagh, Lucknow by the senior officers of RDSO and SIDBI.
Railways, the second largest Government buyer after Ministry of Defence, procure about Rs. 80,000 crore of Goods and Services every year.
The concept for the fast track for MSME suppliers of Railways was laid by the Railways Minister, Suresh Prabhu at a meeting conducted recently.
RDSO has already taken a number of initiatives to encourage participation of MSMEs in Railways procurements. The most significant are reservation of 20% of all orders for new entrants and earmarking of development orders to MSMEs.
SIDBI on its end are offering financial package to MSMEs developing innovative solutions. Towards ‘Ease of Doing Business’ for MSMEs RDSO has already launched a single portal for all information and minimised the number of documents from 22 to 6.
Railways has also reduced the registration charges for micro and small enterprises from Rs. 25,000 to Rs. 15,000 and extended the period of re-audits to 5 years.
FISME is at the fore front for cutting a respectable share for MSMEs in the pie of the Government order of about Rs. 2 trillion rupees, annually. For this while on the one hand the FISME leadership is working with large buyers like Railways, it is also working at the policy level to ease the procurements under compulsory ‘make in India’ accessible to MSMEs.
For the Railways, FISME will facilitate SIDBI in organising MSME suppliers’ meet with railways, at the all India level, to iron out the last mile bottlenecks.
Suggesting the measures at a meeting with Union Minister for Railways Suresh Prabhu on development of micro and small enterprises in Railways, FISME and SIDBI enlisted measures such as 100% development orders to new firms, 20% reservation of regular order to new vendors, reduction in registration fee from Rs.25000 to Rs.15000 by Research Designs and Standards Organisation (RDSO), and reduction in number of documents from 22 to 5 by RDSO.
Even a 20% share of it, as reserved by the Government for MSMEs will provide a Rs. 16,000 crore market for MSMEs!
The entire concept crystallised during a meeting taken by Suresh Prabhu, Railways Minister with the representatives of MSME bodies, recently.
At the meeting the Railways Minister directed workable solutions for enhancing participation of MSMEs in Railways in a time bound manner.
Accordingly, SIDBI and Railways planned to organise Buy – Make in India campaign for MSMEs at all India level.
The focus of these programmes will be to make the MSMEs aware about the special dispensations in Railways procurement for MSMEs and the items available on the table to supply.
Railways have already decided 100% development orders to new firms, which will benefit MSMEs to break the monopoly of multinationals in Railways supply.
Railways have also decided for 20% reservation of regular orders for new firms again to benefit MSMEs.
SIDBI at their end will be offering special financial package to MSME suppliers under their ‘SRIJAN’ scheme to develop innovative products for Railways.
Commenting on the development, Naveen Jain, entrepreneur from Muzaffarnagar and regular supplier to Railways mentioned that the initiative is an welcome step.
Railways should open the gate wider for MSMEs by simplifying the registration process and lower the upfront fees for registration and testing, Jain quipped.
According to Anil Bhardwaj, Secretary General, FISME, the multiplicity of Standards is a major barrier for MSMEs to conform and supply Railways.
Railways should review their standardisation process and minimise the number of essential standards, if they want to provide a level playing field, commented Bhardwaj.
The forthcoming programme at Lucknow may act as the curtain raiser for joining the Railways market.