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Govt amends rules to ban global tender for procurement up to Rs 200 crores to benefit MSMEs

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Govt notifies changes in rules disallowing global tender

On May 21, 2020 Government has notified the amendments to the General Financial Rules(GFR) 2017 to ensure that goods and services valued less than Rs 200 crores are procured from domestic firms, which states that the global tenders will be banned for government procurement upto 200 crores as announced in the AatmanirbharBharat Package. This move will boost domestic suppliers, particularly Micro, Small and Medium Enterprises(MSMEs).

Major Highlights

i.No Global Tender Enquiry(GTE) will 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.

ii.In exceptional cases, where the Ministry or the Department considers GTE to have special reasons for tenders below mentioned  limits,  it may record its detailed justification and seek prior approval for relaxation to the rule from competent authority specified by the Department of Expenditure.

iii.Small and  medium businesses in India accounts for about a 3rd of Gross Domestic Product(GDP) and employs more than 11 crore people. The package announced helps them to overcome COVID-19 disruptions.

About GFR:

i.It is a compilation of rules and orders of the Government of India to be followed by all while dealing with matters involving public finances.

ii.These rules and orders are treated as executive instructions to be observed by all departments and organisations under the Government and specified bodies except otherwise provided for in these rules.

iii.It was issued for the 1st  time in 1947 bringing together in one place all existing orders and instructions pertaining to financial matters. They are modified & issued as  GFRs 1963, GFRs 2005 & GFRs  2017.