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MSME Government Tender who had cheered the announcement made by Finance Minister Nirmala Sitharaman as part of the ‘Atmanirbhar Bharat’ package for MSMEs barring global firms from partaking in tenders below Rs. 200 crore, are in for a crude shock. 

The MNCs in India are crowding out MSMEs from tenders which were supposed to be accessible to them.  After the announcement the office of Finance Minister had tweeted “Govt has notified the amendments to the General Financial Rules 2017 to ensure that henceforth global tenders will be disallowed in government procurement up to Rs 200 crore”. 

 The reality on ground is turning out to be totally different.  Tender after tender, the qualification criteria are being set in a way that only MNCs in India qualify and exclude Indian MSMEs.  

A recent tender floated by Delhi Transco valuing 18 core suddenly raised the bar of past experience to exclude Indian MSME while only letting the MNCs to qualify.  The qualifying criteria for 220kV GIS (T19P090467 ) increased the past performance from 2 years experience of 2 bays in 1 substation to 2 years experience of 12 bays in 2 substations. 

What is interesting is that  these MNCs when they set up their Indian plants – qualifying requirement at the time generally asked for 2 bays in 1 substation experience for 2 yrs and collaborator’s experience was accepted and these MNCs qualified based on credentials of their parent company only.  In yet another tender floated by Rajasthan Rajya Vidyut Prasaran for 132kV GIS (RVPN/ EHV/ ASP/TN-54 ) valuing 31 crore asked for excessively high supply experience – 50 Nos./year in last 3 yrs out of which 30 Nos. supplied in India only.  Earlier Technical Collaborator’s experience was considered – now this clause deleted.

 The Power Transmission Company of Uttrakhand followed the same steps for tenders of 132kV GIS and 220kV GIS valuing 35 and 42 Cr respectively. To exclude the only Indian MSME supplier other than MNCs,  a new clause was added asking for 20 numbers supply experience from Indian manufacturing facility only. As suspected,  the Technical Collaborator’s experience, considered  earlier, was quietly buried.   Federation of Indian Micro and Small & Medium Enterprises (FISME) which is collating experiences of MSMEs in accessing the ‘Atmanirbhar Bharat’ package announced by Government spot a pattern in this.  “MNCs in India particularly in power sector are following a dubious practice of influencing the qualifying criteria fixed in manner that allows only 2-3 MNCs to pass through. When they entered in India they lobbied for collaborator’s experience to be considered but once they supplied in India, they don’t want Indian companies having collaborations to compete with them disallowing collaborator’s experience”, says Anil Bhardwaj, Secretary General of FISME.    

Finance Minister Nirmala Sitharaman announced that National Bank for Agriculture and Rural Development (NABARD) will provide an additional emergency working capital funding of Rs 30,000 crore to farmers.

This, she said, is over and above the Rs 90,000 crore provided by NABARD through the normal refinance route during this year. The finance minister said that the additional Rs 30,000 crore will be immediately released.

NABARD will offer this working capital fund to meet farmers’ crop loan requirements through rural cooperative banks and regional rural banks (RRBs)

This will benefit 30 million farmers, including the small and marginal. Under this scheme, Sitharaman said that front-loading facilities will be provided to 33 state cooperative banks, 351 district cooperative banks and 43 regional rural banks on the basis of their loans. “This will meet the post-harvest requirement (Rabi) and the current Kharif in May / June. This will directly reach rural India and marginal small farmers,” said the finance minister. Sitharaman pointed out the inadequate financial resources available to small and marginal farmers, adding that RRBs and rural cooperative banks are the main source of credit for this category. This scheme is part of the Atmanirbhar Bharat package announced by Prime Minister Narendra Modi on May 12

The government needs to provide a credit guarantee scheme to alleviate the pervasive risk aversion in the financial sector, former Reserve Bank of India governor Duvvuri Subbarao said in a webinar on Friday.

“Government needs to consider spending on livelihood support, improving and expanding medical infrastructure, and provide standing guarantee to banks to lend and give loans,” Subbarao said in a panel discussion on the financial sector, hosted by the Confederation of Indian Industry (CII).

Elaborating on the required financial sector reforms, Subbarao said rationalisation of the cost of credit for all kinds of borrowers and the access to credit should be part of government’s objectives.

Given the highly leveraged nature of the financial sector, a spillover of the crisis from the real sector would have a disproportionately large impact on other sectors of the economy, according to Uday Kotak, managing director of Kotak Mahindra Bank, who was a part of the panel discussion

Speaking for the non-banking finance companies (NBFC) sector, Sajiv Bajaj, chairman of Bajaj Finserv, felt that NBFCs and insurance should come under the Essential Services Management Act to ensure access to core financial services in the current scenario.

The government has issued a notification taking over the National Housing Bank ( NHB) after buying entire stake for Rs 1,450 crore from the Reserve Bank of India ( RBI).

The RBI has exited the NHB, thus making it a fully government-owned entity. The central bank was holding 100 per cent stake in the NHB, the housing finance regulator.

The move is part of ending the cross-holding in regulatory institutions and follows the recommendation of Narasimham-II committee report of October 2001 and the RBI’s own discussion paper on the same, titled ‘Harmonising the Role and Operations of Development Financial Institutions and Banks’.

“The central government hereby notifies that the subscribed capital of Rs 1,450 crore of the NHB by the RBI, stands transferred to, and vested in the central government upon payment of the face value ofthe subscribed capital, to the RBI . with effect from the 19th day of March, 2019,” said the finance ministry notification dated April 29.

The Narasimham panel had said the RBI could not own those entities which are regulated by it.

The RBI has also divested its shareholding in Nabard. The central bank held 72.5 per cent equity in Nabard worth Rs 1,450 crore, of which 71.5 per cent amounting to Rs 1,430 crore were divested way back in October 2010 and the residual shareholding was divested on February 26, 2019.

Earlier, based on the second Narasimham committee recommendations, the RBI had proposed to transfer its ownership in State Bank of India, NHB and Nabard to the government in October 2001.

The decision to establish NHB was announced in the Budget 1987-88. Following that, the National Housing Bank Bill, providing a legislative framework for the NHB, was passed by Parliament in the winter session of 1987 and it became an Act on December 23, 1987.

The National Housing Policy of 1988 envisaged setting up of the NHB as the apex institution to promote the housing sector.

Animal husbandry is one of the most profitable businesses for farmers not only in India but across the globe. Moreover, the animal husbandry business is considered to be an occupation where the probability of loss is extremely low. Moreover, many new scientific methods have been developed in the animal husbandry sector, which is proving very beneficial for the farmers. Keeping this thing in mind, the government has operated and initiated ‘Dairy Entrepreneur Development Scheme’ to help the dairy farmers to encourage dairy sector across the country amid the countrywide lockdown. 

As per the report, the DEDS scheme has been started by the central government from 1st September 2010. Under this scheme, the government has decided to provide a subsidy of up to 33.33 per cent and you can take a loan up to Rs. 7 lakh. As per the report, there is a provision to provide a subsidy of up to 33.33 per cent of the total project cost to the person who has dairy or buffalo rearing. Under this scheme, the Livestock Department will provide a loan of 7 lakh to 10 buffalo dairy.