Cabinet approves new policy for govt to buy domestically-produced goods | business-news | Hindustan Times
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Cabinet approves new policy for govt to buy domestically-produced goods

The new policy will give a substantial boost to domestic manufacturing and service provision, which will lead to creation of more jobs.

business Updated: May 24, 2017 20:59 IST
HT Correspondent
Prime Minister Narendra Modi’s cabinet approved a new government procurement policy.
Prime Minister Narendra Modi’s cabinet approved a new government procurement policy.(HT photo)

In a bid to boost the flagship Make in India initiative, the Union cabinet on Wednesday approved a policy that prefers purchase of domestically produced goods by the government and state-owned firms.

“To promote Make in India, there was a proposal that the government will prefer purchase of domestically produced goods,” finance minister Arun Jaitley said in a media briefing.

The new policy will give a substantial boost to domestic manufacturing and service provision, which will lead to creation of more jobs.

It will also stimulate the flow of capital and technology into domestic manufacturing and services.

Procurement by the government is substantial in amount and can contribute towards this policy objective.

Local content can be increased through partnerships, cooperation with local companies, establishing production units in India or joint ventures (JV) with Indian suppliers, increasing the participation of local employees in services and by training them.

The policy will be implemented through an administrative order as per Rule 153 (iii) of the General Financial Rules.

In procurement of goods for Rs 50 lakh and less, only local suppliers will be eligible.

Small purchases of less than Rs 5 lakh are exempted from the new policy. The order also covers autonomous bodies, government companies/ entities under the government’s control.

The policy has been developed keeping in view the core principles of procurement including competitiveness and adhering to sound procurement practices and execution of orders, an official release said.

“The policy would continue to maintain the balance between promoting Make in India and ensuring timely, value-for-money products for the procuring entities.”