May 15, 2017

India First: New Mantra For Govt. Purchases


It's India First for the government and it means potentially a $600 billion-plus ‘market’ for Indian manufacturing and services companies. The Centre’s recast of its General Financial Rules (GFR) that guide public finance, which includes government procurement, and created an enabling provision that gives first preference for “locally manufactured goods or locally produced services.”

On March 7, the reworked GFR was announced. Government procurement in India is around 30% of GDP, which currently is around $2.1 trillion. That means $600 billion-plus worth of goods and services bought by government departments will now be guided by the amended Rule 153 of GFR 2017.

“Reserved Items and other Purchase/Price Preference Policy”, rule states that “The Central Government may, by notification, provide for mandatory procurement of any goods or services from any category of bidders, or provide for preference to bidders on the grounds of promotion of locally manufactured goods or locally provided services.”

Reportedly, senior officials said that the rule will mean that any government department can bring in a national procurement policy for a good or service mandating that this be procured preferably indigenously. These officials also said the finance ministry will issue detailed guidelines and manuals on procurements soon.

Officials further said, will greatly add to the acceleration of local procurement because GFR sets the guidelines for public finances.

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