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Changes in Rules Disallowing Global Tender for Procurement up to Rs 200 crores notified by the Government

By Priyam Jain      May 22, 2020      0 Comments
Changes in Rules Nirmala Sitharaman

In various amendments to the General Financial Rules (GFR) it was ensured that goods and services valued less than Rs 200 crore are being procured from domestic firms, a move which will benefit MSMEs as notified by the government officials. 

In a tweet which claims to be a boost to domestic suppliers, especially the MSMEs, the Finance Minister Nirmala Sitharaman stated that “Government 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.”

Last week the finance minister had announced an economic support package for micro, small and medium enterprises, which disallowed global tender for government procurement up to Rs 200 crores. The Department of Expenditure under the Ministry of Finance had stated that “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.”

It was further elucidated that “Provided that for tenders below such limit, in exceptional cases where the Ministry of 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.”

As announced last week the MSME package comprised of Rs 3 lakh crore of collateral-free loans, which would indeed benefit about 45 lakh small businesses. It was also estimated that about two lakh businesses would benefit from a Rs 20,000 crore subordinate debt for stressed or loan defaulting MSMEs, stating that a fund for MSMEs is also in plans to be created, which would, therefore, infuse about Rs 50,000 crore equity in units that have shown considerable growth potential. 

Earlier the definition of MSMEs had also been changed from a pure investment-based to one that provides for higher investments and turnover for companies to remain as small businesses, and therefore indeed help them avail financial and other incentives. It was also recorded that an estimated Rs one lakh crore in dues to the MSMEs by the government and Central PSUs would indefinitely be released within 45 days. 



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