PRICE
AND PURCHASE PREFERENCE POLICY
FOR MARKETING SSI PRODUCTS
Purchase Preference Policy
Price Preference Policy
Complete List of Reserved Items (including Handicrafts
Sector)
Single Point Registration Scheme
The importance of the cottage
and small scale industries to the National Economy was recognised by the
Government as early as in 1948 under the Industrial Policy Resolution.
In pursuance of this Policy, a comprehensive programme for the development
of the Sector was drawn in early 50's. The marketing assistance to the
small scale units through preferential purchase by the Central and State
Purchase Organisations was emphasised. The emphasis was reiterated in the
Government Policy in 1991.
The small scale sector has grown significantly in the last 4-5 decades. The Sector has certain distinct
advantages from the point of view of Indian economy viz. low intensity
capital investment, high employment potential, low intensity of import
in export production etc.
Purchase Preference Policy
The policy of reservation
of items for exclusive purchase has been in vogue since late 60's as a
measure of market support to the SSI sector. The Stores Purchase Policy
of the Government prior to 1989 was in the form of categorisation of items
in six major groups as detailed below:-
Group-I: Items which are of
no interest to small scale units and can be solely procured only from large
scale units (128 items).
Group-II: Items which can
be purchased solely from large scale units but where it is possible for
the large scale units to job contract accessories and components to SSI
units (159 items).
Group-III: Items which can
be purchased both from small scale and large scale industrial units.
Group-IV: Items which are
reserved for exclusive purchase from small scale units (409 items).
Group-V: Items which are to
be purchased from SSI to the extent of 75% of the requirement (13 items)
and
Group-VI: Items which are
to be procured exclusively from the SSI units to the extent of 50% of the
requirement (28 items).
However, with effect from
July 28, 1989, the Purchase Policy of the Government was changed in a major
way and the categorisation of the items was reduced to the following two
major groups, viz.
Items of stores reserved
for exclusive purchase from KVIC/Women's Development Corporations/Small
Scale Units and
Others not so reserved.
The first group comprised of 409 items earlier reserved for exclusive purchase
from the small scale sector.
To consider the question
of inclusion of additional items in the Group-IV (reserved exclusively
for purchase from small scale sector), a Committee was constituted in 1968
with Secretary (Department of Supply) as its Chairman. The Committee was
reconstituted on August 6, 1979 and again on October 10, 1979 and December
4, 1979. The Members of the Committee include representatives from various
organisations viz. Ministry of Defence, Railways, DC (Handloom), KVIC,
P&T, DC (Handicrafts) etc. and DC (SSI) as a Member Secretary.
The list of 409 items reserved
for purchase from the SSI sector was reviewed recently and after deleting
items having common nomenclature and making the entries more generic as
well as addition of new items, a revised list of 358 Items was approved
by the Committee which also includes 8 handicrafts items reserved for purchase
from the Handicraft Sector.
Price Preference Policy
Assistance under Government
Stores Purchase Programme in the form of reservation of products for exclusive
purchase from small scale sector and price preference is one of the major
instruments for providing marketing support to the small scale industries.
The Director General of Supplies and Disposals, the Central Purchasing
Organisation of Government of India provides a number of facilities to
small scale industries under its Government Stores Purchase Programmes.
These include reservation
of certain products for exclusive purchase from the small scale sector
and price preference upto 15% in case of selected items which are produced
in both large scale as well as small scale units.
The Single
Point Registration Scheme of NSIC was launched as a Market Support
Measure for the SSI sector. Under this Scheme, the following benefits are
given to the SSI units which get themselves registered with the NSIC:
Availability of Tender sets free of cost;
Exemption from payment of Earnest Money Deposit;
Exemption from payment of Security Deposit;
Price preference upto 15% over the lowest quotation of the large scale units (on merits).
The NSIC while registering
a unit under this scheme is required to undertake capacity assessment of
the applicant through the institutional set up of the SISIs in the country.
They are also required to obtain confidential report from the bankers of
the manufacturers about the credit worthiness/financial standing of the
same. The units registered with NSIC under this scheme are given a registration
certificate indicating items for which registered and monetary limit upto
which registered.
It is clarified that policy
of the Price Preference of 15% is a critical benefit available to the SSI
sector. The benefit is available to compensate them on account of non-availability
of economies of scale, poor resource base, poor access to raw- material
etc. as compared to the large scale sector. The policy of the Price Preference
of 15% is an independent policy and is in no way linked with the price
preference of 10% to the PSUs and other purchasers.
