SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has requested the Chief Secretary address noncompliance with MSME reservation regulations related to a tender issued by the Department of Irrigation and Flood Control for “construction of chain link fencing.”
In a letter to the UT Chief Secretary, President Shahid Kamili highlighted that despite requests for clarification and a halt on the tender process, the department has continued with bid openings and is expected to award the contract.
Kamili called for action against the officials involved, noting that the department’s actions raised issues about adherence to policies and fair opportunities for Micro, Small, and Medium Enterprises (MSMEs).
According to an FCIK release, the tender involved primarily manufacturing work (over 80 per cent) and a minor component of service work (less than 20 per cent). Under the Public Procurement Policy and Ministry’s Circular (F. No. 5/2(6)/2022/E-P&G/Policy(E-4020978) dated January 4, 2023), such tenders are to be reserved for MSMEs registered on the Udyam portal for both manufacturing and services. This policy aims to support MSMEs by ensuring a level playing field and promoting economic growth.
FCIK expressed concern that proceeding with the tender without proper MSME reservation could impact the MSME sector, which is important for economic development and job creation. The Federation has asked the Chief Secretary to ensure the current tender complies with MSME reservation regulations.
Additionally, FCIK has requested clear guidelines for reserving tenders with significant manufacturing components exclusively for MSMEs and the reintroduction of price preferences for local manufacturers to support regional economic balance.
In a separate letter to the Development Commissioner of the Ministry of MSME, FCIK noted a trend of merging industrial goods with “Works Contracts” or “Combined Contracts,” which has excluded MSMEs from participation.
The President of FCIK highlighted examples such as the tender by the Irrigation and Flood Control department and the Revamped Distribution Sector Scheme (RDSS) by Kashmir Power Development Corporation Limited (KPDCL), which have sidelined local manufacturers from contracts involving their own products.
FCIK urged the Development Commissioner to work with the Chief Secretary to issue guidelines for ensuring the reservation of contracts with divisible components of supply and labor exclusively for local MSMEs. FCIK also requested steps to prevent the merging of industrial goods with works contracts that disadvantage MSMEs.
The Federation emphasized that without prompt intervention, local industrial units face risks including potential closure and a loss of confidence in the public procurement system, which would negatively impact the local economy and broader economic goals.
