The Public Sector Units (PSUs) were demanded by the small and medium business units of India to procure a minimum of 20% of their requirements from the SME sector. They proposed the government to make it mandatory for purchasing the requirements for public sector units and also other government departments and state funded infrastructure projects.
It is known that out of the total annual purchase of Rs. 1,70,000 crores, the government has been procuring 4% to 5% from MSMEs. With a contribution of nearly 40% exports (with $246 billion in 2010-11) and 45% of industrial output, the MSME (Micro, Small, and Medium Enterprises) sector has a great role in Indian economy. It is also found to provide employment for 60 million people and is contributing 8% to the country’s GDP. Based on these values and the highest contribution in Indian GDP, the MSME sector has proposed the demand of requirements.