‘Make in India’ to be preferred more in government procurement for better India
 Source : News Bharati English  Date : 25-May-2017

New Delhi, May 25: Make in India is such an initiative that has boosted to foster innovation, enhance skill development, and facilitate investment. The success of Make in India is unquestionable, even an African giant corporate took initiative for Make In Africa, getting inspired by make in India. To provide preference to 'Make in India' in government procurements, Union Cabinet has approved a policy. The new policy will give a substantial boost to domestic manufacturing and service provision leading to more employment opportunities.

Details of the new policy:

The policy will be implemented through an Order pursuant to Rule 153(iii) of the General Financial Rules, 2017 to provide purchase preference (linked with local content) in Government procurements. Under the policy, preference in Government procurement will be given to local suppliers. Local suppliers are those whose goods or services meet prescribed minimum thresholds (ordinarily 50%) for local content. Local content is essentially domestic value addition.

In the procurement of goods for Rs. 50 lakhs and less, and where the Nodal Ministry determines that there are sufficient local capacity and local competition, only local suppliers will be eligible. For procurements valued at more than Rs. 50 lakhs (or where there is insufficient local capacity/ competition) if the lowest bid is not from a non-local supplier, the lowest-cost local supplier who is within a margin of 20% of the lowest bid, will be given the opportunity to match the lowest bid. If the procurement is of a type that the order can be divided and given to more than one supplier, the non-local supplier who is the lowest bidder will get half of the order and the local supplier will get the other half if it agrees to match the price of the lowest bid. If the procurement cannot be divided, then the lowest cost local supplier will be given the order if it agrees to match the lowest bid. Small purchases of less than Rs.5 lakhs are exempted. The order also covers autonomous bodies, government companies/ entities under the government’s control.

The policy also requires that specifications in tenders must not be restrictive e.g. should not require proof of supply in other countries or proof of exports in respect of previous experience. They must not result in the unreasonable exclusion of local suppliers who would otherwise be eligible, beyond what is essential for ensuring quality or creditworthiness of the supplier.

The policy lays down a procedure for verification of local content relying primarily on self-certification. There will be penal consequences for false declarations. In some cases, verification by statutory / cost auditors etc. will be required.