SC/ST Entrepreneurs’ Rights Being Denied: 4% Government Procurement Target Stuck at Just 1.79% Even After 9 Years!

New Delhi- The Indian government’s policy mandating 4% public procurement from Micro and Small Enterprises (MSEs) owned by Scheduled Castes (SC) and Scheduled Tribes (ST) entrepreneurs continues to be widely violated. Official data presented in the Rajya Sabha on March 9, 2026, reveals that the actual share remains abysmally low at only 1.79% as of March 5.

Prof. Varsha Eknath Gaikwad, Member of Parliament from Mumbai North Central, wrote a strong letter to President Droupadi Murmu, urging her intervention to ensure strict and uniform implementation of the policy across the country, especially at the state level.

What Does the Policy Say?

The Public Procurement Policy for Micro and Small Enterprises (MSEs), Order 2012 (notified under the MSMED Act 2006 and amended in 2018) clearly mandates that every Central Ministry, Department, and Central Public Sector Enterprise (CPSE) must procure a minimum of 25% of its total annual purchases (goods and services) from MSEs.

Out of this 25%, a sub-target of 4% is exclusively reserved for MSEs owned by SC/ST entrepreneurs, and 3% for women-owned MSEs. This 4% is of the total procurement value, not 4% of the 25%.

Key provisions include:

• Free tender documents for MSEs

• Exemption from Earnest Money Deposit (EMD)

• Reservation of 358 items exclusively for MSEs

• Mandatory vendor development programmes and buyer-seller meets

An SC/ST-owned MSE is defined as one where the proprietor belongs to SC/ST, or in partnership firms, SC/ST partners hold at least 51% share, or in companies, SC/ST promoters hold at least 51% shares.

The objective is to promote inclusive economic growth, encourage entrepreneurship among marginalized communities, and ensure their equitable participation in national development.

Shocking Data from Rajya Sabha

In response to Starred Question No. 171 by Shri Golla Baburao, the Minister of Micro, Small and Medium Enterprises, Shri Jitan Ram Manjhi, confirmed the 4% mandate and laid out the following procurement figures from the MSME Sambandh Portal (launched December 8, 2017):

Even after nine years, the share has barely crossed 1.79%. While overall MSE procurement often exceeds 25% in many departments, the specific SC/ST sub-target is consistently ignored.

The government also runs the National SC/ST Hub (NSSH) Scheme since October 2016 precisely to promote SC/ST entrepreneurship and help achieve this 4% target through training, marketing support, and capacity building. Yet, the gap between policy and ground reality remains wide.

Why is the Rule Being Flouted?

Many ministries and CPSEs meet the overall 25% MSE target but fail to allocate the mandatory 4% to SC/ST-owned enterprises.

Limited participation of SC/ST entrepreneurs due to lack of awareness, technical know-how, and market access.

Inadequate monitoring and weak enforcement mechanisms.

Inconsistent adoption and implementation of the policy by state governments.

Procurement data is maintained category-wise but not state-wise, making it difficult to pinpoint regional failures.

In her letter dated March 24, Prof. Varsha Eknath Gaikwad highlighted that despite the policy being in place, SC/ST entrepreneurs are not getting their due share. She pointed out the inconsistent and often negligible implementation at the state level, which is defeating the very purpose of social and economic empowerment.

She requested the President to direct the Government of India to ensure strict and uniform implementation across all ministries, departments, and state governments. She suggested measures such as:

• Regular monitoring of compliance

• Awareness campaigns for procurement officers

• Capacity-building programmes for SC/ST entrepreneurs

Her intervention is seen as a timely call for social justice in economic opportunities.