Even as the Government of India has taken reformative measures to enhance transparency and efficiency in the industrial sector through Government e-Marketplace (GeM) which brings on board buyers and sellers for public procurement, the Small Scale Industries of Jammu and Kashmir see their future painted in dark.
“Following the Union Government’s directives, the J&K Government has asked all of the administrative departments to compulsorily procure required goods and services through GeM portal. While this is a good initiative towards ensuring transparency in government procurements, it also needs to take conflicting ground realities into account,” say the industrial associations from across the Union Territory of Jammu and Kashmir, which have come together to raise the many complexities relating to the portal, that they are experiencing in the local context.
“Until now, 1700 SSI units from J&K and Ladakh, registered with J&K Small Scale Industries Development Corporation Limited, were being provided marketing support by SICOP. This support will end with the coming of GeM portal, affecting the business of those units as well as SICOP,” rue the industrialists.
An official, not wishing to reveal his identity, states that SICOP’s last recorded annual turnover was Rs 400 crores, and with the conduct of procurement process through GeM portal, the turnover comes down to 60%. Also, he tells that it has virtually impacted nearly 5000 local Micro Small & Medium Enterprises (MSME) units.
“The sudden order has put in jeopardy the future of local industries,” they add.
View: Official order by Finance Commissioner
Pertinently, the erstwhile State Governments of J&K vide Order No: 342-Ind of (DIC) of 1995 dated 1.11.1995 read with Govt. Order No: 418-Ind of 1997 dated 6.10.1997 and Govt. order No: 189-Ind of 2009 dated 26.08.2009 had reserved certain items for exclusive purchase by the government departments/organizations, including Public Sector Undertakings (PSUs), from local SSI units through SICOP.
The twenty three reserved items were – B.A Wire (Black Annealed Wire); B.A. Barbed Wire (Black Annealed Barbed Wire); Barbed Wire; PCC Electric Traction Poles (Plain Cement Concrete); Steel Tubular Poles; AAC/ ACSR Conductors (All Aluminium/Aluminium Conductors Steel Reinforced); M.S. Angle (Mild Steel Angle); Tor Steel/CTD Bars (Twisted Ore Reinforced Steel/Cold Twisted & Deformed Bars); PCC Fence Posts (Plain Cement Concrete Fence Posts); Chain Link Fencing & Wire Crates; Steel & Wooden Furniture; HD Moulded Water Storage Tanks/Pipes (High Density Moulded Storage Tanks/Pipes); Steel Doors/Window Frames & Shutters; Wall to Wall carpets; Steel Fabrication Items:- Steel Tanks, Steel Trusses, Steel Bridges (Up to 100 meters span); Wooden Joinery Items; Sheet Metal Items:- Steel Trunks, Steel Buckets, Steel Storage Bins, Poultry equipments & Agriculture Equipments; Electric Appliances:- Geysers, Desert Coolers, Room Heaters, Convectors, Fans & Air Conditioners; RCC Hume/Spun Pipes (Reinforced Cement Concrete Hume/Spun Pipes); PVC Cables (Poly Vinyl Chloride:- Armoured/un armored Cables, Conduit Pipes & Plastic Moulded Batons; Lead Acid Automobile Batteries; Plastic Moulded Furniture Items:- Chairs etc; and Rigid PVD Pipes (Rigid Poly Vinyl Chloride Pipes).
“All the orders were being placed with SICOP, and it would then procure the required items at reasonable rates from the local SSI sector through the annual tendering procedure. The SICOP was tasked to distribute the orders equitably amongst the registered SSI units, and ensure standardization of the items before supplying them to the intended department. This was to give an assurance to an entrepreneur that he will get a share in the Government purchase, while also helping him to make up for the losses he might have incurred in that particular year,” says an industrialist from Srinagar.
He mentions projects like Saubhagya and Samagra Shiksha Abhiyan, which provided work to local industries and employees.
Further, SICOP used to provide the local units with price preference upto 20% to aid their existence and sustenance, given the difficult situations they are faced with in the region. Out of this, 4% price preference was meant for SC/ST units.
“J&K is a place which lacks all the 5 M’s required for the manufacturing industry – Man, Machine, Money, Material, and Market. Several units are in the remote areas. Thus, J&K’s industrial policy allowed the price preference incentive to the local units on goods and services intended for government departments/organizations,” an industrialist from Jammu mentions.
He adds, “There’s uncertainty about price preference on GeM portal. What we know as of now is that since GeM portal is a pan-India thing, we will be deprived of the local price preference we were getting. Departments have already started buying goods on minimum rates, without giving price preferences, though it is a part of ongoing J&K Industrial policy.”
The industrial associations have demanded that they get some amount of price preference, at least for tenders from J&K government departments/organizations.
Moreover, GeM portal has enabled manufacturers, traders and buyers to come on the same platform for procurement procedure.
“We are being exposed to great competition from industries from around the country, and the presence of traders on the same portal has increased the competition. Many unit holders have apprehended that the digital platform will wipe out local industries, especially the micro-scale units,” tells an industrialist.
Furthermore, what adds to their grievance are frequent internet restrictions.
“It is a known fact that the J&K industries work under locational disadvantages and prolonged internet restrictions since August 5 have made their survival more difficult. For us, registering and then being part of the later process on GeM is not easy, when there is limited access to the internet,” remarks an industrialist from Valley.
“We are ready for GeM, and most of the unit holders are already applying for registration on the portal – but it is a lengthy process, and lengthier for unit holders of J&K without proper internet access. We urge the government to give a breather of atleast 6 months to let all the units of J&K be registered on the portal, and also to let the owners acclimatize themselves with the whole process,” demand the industrialists.
“The dynamics of the market here are different from the rest of the country. The change being ‘imposed’ should be smooth, and not so sudden that it kills units and employments,” says an industrialist.
View: An appeal for breathing period
The GeM is the national public procurement portal offering end to end solution for all procurement needs of Government departments and their autonomous bodies. Under the Rule 149 of General Financial Rules (GFR) 2017 mandates procurement of all common use goods and services available in GeM Portal mandatory for all government departments. According to the government, GeM has transformed the public procurement in the country by leveraging technology, and making procurement contactless, paperless and cashless.
Also: Read my article at THE NEWS NOW
SSI units in UT see GeM portal as death blow to their business
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