Tamil Nadu government reiterates purchase preference for SC/ST-owned firms while floating tenders

The Tamil Nadu government has reiterated its instructions to authorities to enhance the participation of entrepreneurs from the Scheduled Caste (SC) and Scheduled Tribe (ST) communities in the public procurement system. It was noticed that procurement entities were not aware of the mandatory purchase preference, which necessitated the reiteration to the authorities.

In a communication to authorities, Secretary (Expenditure) in the State government’s Finance Department stated that the tender document should include a specific clause that 5% of the total requirement in the procurement would be mandatorily awarded to domestic enterprises owned by persons from the SC and ST communities.

“You [Authorities] are hereby instructed to ensure strict implementation of the mandatory purchase preference as indicated above in all the procurement done by your organisation and all entities subordinate to your organisation, without fail. I further request you to provide a quarterly report regarding compliance for all the tenders floated by your organisation,” the communication said.

The State government had enabled the mandatory purchase preference for enterprises owned by entrepreneurs from SC and ST communities under certain provisions of the Tamil Nadu Transparency in Tenders Act, 1998, and Rules, 2000.

Any enterprise located in Tamil Nadu and is owned by any person belonging to these communities or any enterprise, which is a firm or limited liability partnership having its registered office and place of business in the State and where no less than three-fourths of the partners belong to these communities, are defined as ‘Domestic Enterprises owned by SCs or STs’.

Any domestic enterprise, which is a company having its registered office and place of business in the State, where more than 50% of the ordinary shareholdings pertain to persons belonging to SC or ST communities and the control of the company, as defined in Section 2(27) of the Companies Act, 2013, is vested with persons belonging to these communities, will also fall under the mandatory purchase preference clause.