The State Cabinet, led by Chief Minister Naveen Patnaik, granted approval to the Odisha Procurement Preference Policy for Micro and Small Manufacturing Enterprises 2023.

This new policy aims to enhance the business activities of 'Odisha Small Manufacturing Enterprises' by favouring the procurement of their manufactured goods by State Government establishments.

The policy is applicable to all State Government establishments concerning the procurement of goods, excluding services such as Work Contracts and EPC contracts.

Its primary focus is on benefiting Odisha Small (and Micro) Manufacturing Enterprises (OSMEs) with an annual turnover not exceeding Rs 50 crore. Startups with an annual turnover of up to Rs 50 crore are also eligible for the same benefits as other small manufacturing enterprises.

The policy introduces an 'Exclusive List,' which includes goods produced by a significant number of Odisha Small Manufacturing Enterprises. Procurement of these goods by State Government establishments will be mandatory and limited to Odisha Small Manufacturing Enterprises through competitive bidding within the state (intra-state tender process). Items will be added to the 'Exclusive List' periodically once the policy is in effect.

For goods not listed under the Exclusive List, an open tender process will be followed. Odisha Small Manufacturing Enterprises will receive a 10% price preference in open tenders for 25% of the total procurement quantity. However, this preference won't apply if the bid of the lowest-bidding Odisha Small Manufacturing Enterprise is beyond the L1+10% range. In such cases, a purchase preference of 15% will be applicable for 15% of the procurement quantity.

Odisha Small Manufacturing Enterprises participating in intra-state and open tender processes will be exempt from depositing the cost of tender paper and EMD. They will also be fully exempt from the past work experience criteria. In intra-state tenders, the annual turnover criteria exemption is granted, while for open tenders, the annual turnover criteria will be relaxed by 90%. Similarly, the performance security deposit for open tenders will be reduced by 75% for Odisha Small Manufacturing Enterprises.

The policy applies specifically to divisible procurement quantities and does not cover goods where the procurement quantity is not divisible.