Govt notifies changes in rules disallowing global tender for procurement up to Rs 200 cr

The government has notified amendments to General Financial Rules (GFR) to ensure that goods and services valued less than Rs 200 crore are being procured from domestic firms, a move which will benefit MSMEs.

"Govt has notified the amendments to the General Financial Rules 2017 to ensure that henceforth global tenders will be disallowed in government procurement up to Rs 200 crore, as announced in the #AatmanirbharBharat Package. A big boost to domestic suppliers, especially MSMEs, the Office of Finance Minister Nirmala Sitharaman said in a tweet.

Sitharaman had last week announced an economic support package for micro, small and medium enterprises (MSMEs), which includes disallowing global tender for government procurement up to Rs 200 crore.

 

Amending the GFR, the Department of Expenditure under Ministry of Finance said, "No Global Tender Enquiry (GTE), however, shall be invited for tenders up to Rs 200 crore or such limit as may be prescribed by the Department of Expenditure from time to time."

"Provided that for tenders below such limit, in exceptional cases where the Ministry or Department feels that there are special reasons for GTE, it may record its detailed justification and seek prior approval for relaxation to the rule from competent authority specified by the Department of Expenditure.

The MSME package announced last week comprised Rs 3 lakh crore of collateral-free loans, which would benefit about 45 lakh small businesses.

Another two lakh such businesses would benefit from a Rs 20,000 crore subordinate debt for stressed or loan defaulting MSMEs, she said, adding a fund of funds for MSMEs is also being created, which will infuse Rs 50,000 crore equity in units that have growth potential.

Also the definition of MSMEs has been changed from a pure investment-based one to that provides for higher investments and turnover for companies to remain as small businesses, and avail financial and other incentives.

Besides, an estimated Rs 1 lakh crore in dues to MSMEs by government and central PSUs will be released within 45 days.

Small and mid-sized businesses in India account for about a third of gross domestic product and employ more than 11 crore people and the package announced on Wednesday is aimed at helping them overcome coronavirus disruptions.