Calls for policy changes to ensure local contractors, manufacturers benefit from centrally sponsored projects
SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has urged the Chief Minister, Omar Abdullah to engage with concerned Central ministries to seek relaxation of procurement and qualification norms under Centrally Sponsored Schemes and projects executed through Central Public Sector Enterprises (CPSEs), so as to ensure fair participation of local MSMEs and contractors of Jammu & Kashmir.
“Without such intervention, public investment will continue to bypass local industry,” FCIK cautioned in a statement issued here, adding that the development projects must translate into local employment, capacity building and economic empowerment, rather than benefitting outside entities alone.
The demand was raised at the conclusion of a two-day CPSE Level Vendor Development Programme, organised by the Ministry of MSME at SKICC, Srinagar. The programme was participated by representatives of IOCL, BPCL, NHPC, NSIC, GeM, FCI, HPCL, Power Grid Corporation, CPWD, NHAI and others.
Representatives of these CPSEs made detailed presentations on their procurement and execution procedures. While most CPSEs reiterated compliance with the Central Public Procurement Policy mandating 25% procurement from Micro and Small Enterprises, it was categorically stated that no distinction is made between local and outside MSEs.
The CPSEs expressed their inability to extend purchase or work preference to local enterprises unless enabled through special provisions or relaxations approved by their respective Ministries in consultation with the UT Government.
FCIK expressed serious concern that thousands of crores of rupees worth of Centrally Sponsored and Central Sector projects are being implemented in the Union Territory through CPSEs and, in several cases, through UT-level PSUs governed strictly by central procurement rules prescribed by approving Ministries. Due to high turnover thresholds, bundled works, large-volume supply conditions and stringent experience criteria, local manufacturers and contractors are being effectively excluded from the bidding process.
“This situation is both astonishing and deeply concerning,” FCIK stated, noting that projects meant to drive the development of Jammu & Kashmir are being executed largely by outside agencies and suppliers, leaving local enterprises idle or underutilized. This approach, it said, is depriving the local economy of employment generation, skill development, and industrial growth.
FCIK emphasized that even partial routing of these projects through local enterprises could transform the industrial landscape, strengthen local capacities, and create sustainable employment.
FCIK cited a successful precedent, where constructive engagement by the then State Government with the Ministry of Railways resulted in directions to the executing agency IRCON to extend purchase preference to local enterprises.
“That intervention benefited hundreds of local units, enhanced their capacities and generated significant employment, clearly demonstrating that proactive engagement with Central Ministries can yield tangible results,” the Federation said.
The concluding session of the two-day vendor programme was presided over by Director Industries and Commerce, Kashmir, Khalid Majid, who agreed to take up the issue with higher authorities and explore ways to ensure that local enterprises benefit from ongoing projects. He also assured participants that the UT Government’s revised Procurement Policy, presently under review, would aim to strengthen local enterprises in public procurement.
On the first day of the programme, Director Handicrafts and Handlooms, Mr. Masarat-ul-Islam, and Managing Director, KPDCL Mehmood Ahmad Shah, addressed the participants and shared key insights.
Joint Director, MSME, Mr. Amit Kumar Tamaria, delivered the keynote address and assured full support of the Ministry of MSME to local enterprises. The welcome address was delivered by Assistant Director, MSME, Mr. Suhail Allaqaband, who assured that similar programmes would be organised regularly in future.
A large number of industry leaders from across the Valley participated in the two-day programme under the banner of FCIK, led by Shahid Kamili, and raised meaningful queries and interventions. The members engaged in hot discussions with the representatives of Government e Marketplace and identified number of loopholes in their system of operations.