In India, strides in gender budgeting and supportive policies are fostering greater opportunities for women entrepreneurs

How much of the goods and services purchased by government departments and public sector enterprises come from women-owned businesses? This crucial question is rarely asked, and it underscores the need for gender-responsive procurement policies in India and across South Asia. With government procurement “accounting for an average of 12 per cent of gross domestic product (GDP) in OECD countries, and up to 30 per cent of GDP in many developing countries,” the untapped economic potential for women entrepreneurs to contribute as suppliers of solutions to governments is immense.

Yet, globally, women-owned enterprises still win only 1 per cent of this significant public procurement market. WEConnect International is actively working to bridge this gap. Our efforts are making headway, especially in countries such as India, where policy frameworks are beginning to reflect a greater emphasis on gender inclusivity.

The central government has increasingly prioritised women-centric policies, evident from the substantial rise in gender budget allocations, which is another way to support women and girls in addition to buying their products and services. For example, in

2013-14, Rs 97,134 crore was earmarked for women’s welfare and empowerment. By 2024-25, this figure had reached Rs 3.27 lakh crore, marking a 19 per cent increase over the actual gender budget expenditure of 2023-24 and a 218.8 per cent increase since 2013-14. For 2024, the Gender Budget accounts for 6.5 per cent of the Union Budget, the highest since the Gender Budget Statement was introduced in 2005-06.

The Statement serves as a vital tool for ministries reviewing programmes from a gender perspective to ensure that more resources are being allocated to benefit women and girls. In the last year (2023-24), the actual expenditure on gender budgeting was 16 per cent higher (Rs 2.75 lakh crore) than the total budgeted amount (Rs 2.38 lakh crore).

The Indian government’s Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2018, exemplifies this progress. The policy mandates that every central ministry, department, and PSU must procure at least 25 per cent of their needs from MSEs, with 3 per cent specifically reserved for women-owned micro and small enterprises. There has been progress since the mandated 3 per cent procurement target for women-owned MSEs was introduced in 2018. Public procurement from these enterprises has risen from almost zero in 2017-18 to 1.8 per cent in 2023-24.

The number of women-owned (owned and controlled by women having the minimum financial interest of 51 per cent of the capital and with women constituting at least 51 per cent of generated employment) MSEs benefiting from public procurement grew from 1,410 (accounting for Rs 232.56 crore) to 21,128 (Rs 3056.4 crore) in six years.

While the evidence is encouraging, there are still gaps and challenges that, if addressed, could help India achieve a more gender-inclusive public procurement ecosystem. For example, there is currently no independent body to resolve complaints in the procurement system, leaving unhappy bidders with only two options: filing complaints directly with the purchasing entity or taking them to arbitration or court as outlined in the General Financial Rules (GFR) 2017.

Generally, there is a pressing need for transparency, well-defined processes, and a robust mechanism for addressing grievances in tender and procurement procedures so that women-owned businesses receive constructive feedback if their bids are unsuccessful. This would enable them to refine their future proposals and compete more effectively. Such measures would help mitigate biases in tendering and procurement processes that disproportionately disadvantage women-owned enterprises. The government could also pass procurement legislation to standardise bidding processes using a central law that sets national standards and state laws that fit specific needs, with the central government providing comprehensive oversight.

Public authorities could also sensitise officials on the need to counteract gender biases that may influence the design of procurement processes. A strong starting point would be to appoint more women to oversee public procurement in government departments. Public procurement from women-owned enterprises in India over the past six years has grown at an average annual growth rate of 70.5 per cent, while the number of beneficiary women entrepreneurs has increased at an average annual rate of 77 per cent because the baseline was close to zero. In 2023-24, total public procurement in India reached Rs 1.70 lakh crore, highlighting a growing opportunity for women to engage with the expanding public procurement market in the world’s fastest-growing economy.

(The writer is CEO and Co-Founder of WEConnect International. With inputs from  Eroshan Alagaretnam, Regional Director for South Asia, WEConnect International. Views are personal)