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New Delhi, July 6 (PTI) The defence sector may be exempted from the proposed compulsory government procurement from small and medium firms, as it imports most of its requirement, a senior government official today said. "We have agreed with the Defence (Ministry) point of view that it can be exempted, but depends upon the final decision," Micro, Small and Medium Enterprises (MSME) Secretary Dinesh Rai told reporters here on the sidelines of a programme organised jointly by FISME, Indiamart.com and IAMAI. The Defence Ministry imports most of its requirements like planes and equipment. "They have to buy many things from abroad, so they won''t able to do (procure from MSEs). They have a point, which we agreed to and many times they do not want to divulge.," Rai said. Besides, ministries, including home and petroleum, and PSUs under them are opposed to the idea of procuring from these micro and small enterprises (MSEs), as they doubt the quality of products from MSME units. The Home Ministry has some issues, they need more time, so let them take some time, the Secretary added. A task-force chaired by Prime Minister''s principal secretary TKA Nair had called for a compulsory procurement policy for MSEs. The task-force had submitted its report to Prime Minister Manmohan Singh in January. The MSME Ministry would take the proposal before the Cabinet for its approval soon. "We are expected to go to the Cabinet within 10 days. We have given the views of the different ministries, then it is up to the Cabinet to decide," Rai said. There are 2.6 crore MSME units in the country, of which 1.86 crore are in the services space. The sector, which was hit by the recent global financial meltdown, contributes 8 per cent to GDP, 45 per cent of the manufactured output and 40 per cent of exports.
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