Ailing CPSEs buy 40% less goods from clients

Reducing the number of CPSEs and their poor health have affected procurement as well. With less than two months for the financial year to end, the procurement of goods and services by central public sector enterprises (CPSEs) is down by 40 per cent against last year.

As many as 116 CPSEs have procured goods and services valued `92,219 crore during the current fiscal, as per the latest update by MSME Sambandh. This is 40 per cent lower than the procurement of last fiscal, which stood at `1,53,441 crore made by 165 CPSEs.

The mandatory procurement from medium and small enterprises too was down by 34 per cent at

`26,711 crore as against

`40,376 crore last year. However, the CPSEs have met the mandatory target of making 25 per cent procurement from MSEs. The procurement from MSEs run by SC/ST entrepreneurs was down by 48 per cent to `426 crore against

`823 crore last year. However, women MSE contribution remained almost similar to last year at `234 crore.

This year’s actual procurement till data is in fact is 26 per cent down from the target of

`1,25,126 crore. The target made by 122 CPSEs itself was lower by 12 per cent than last year’s target of `1,41,705 crore.

According to an industry expert who did not want to be named, reduced number of CPSEs and their poorer health would have reflected in the procurement data. As against 165 CPSEs, which had reported their procurement last year, this time only 116 companies have provided it.

As per Economic Survey, of the total 348 CPSEs as on March 31, 2019, 249 are in operation, 86 CPSEs are yet to start commercial operations and 13 CPSEs are under closure/liquidation. In the past few years, the government had shut around 25 CPSEs.