Under the policy, purchases up to Rs 5 lakh are exempted.
Government, in its bid to boost the local manufacturing, has announced a new Public Procurement Policy that will provide preference to the `Made in India’ products.
Procurement by Government is substantial in amount and thus can contribute towards this policy’s objective.
According to the Official Release,”Local content can be increased through partnerships, cooperation with the local companies, establishing production units in India or joint ventures (JV) with the Indian suppliers, increasing participation of the local employees in the services and by training them”.
According to the Policy, purchases up to Rs 5 lakh are exempted. For those between Rs 5 lakh and Rs 50 lakh, if Ministry concerned assesses that there is sufficient capacity domestically , then only the local suppliers will be eligible. Any entity whose products have 50% or more domestic content will be considered as a “local supplier”.
Similarly, the contracts above Rs 50 lakh or where there is inadequate supply base or competition in India will be awarded to lowest bidder. But if lowest bidder is not a local supplier, lowest cost domestic player who is within a margin of 20% of lowest bid will be given opportunity to match the bid.
The statement further adds that,”They must not result in unreasonable exclusion of the local suppliers who would otherwise be eligible, beyond what is essential for ensuring the quality or the creditworthiness of supplier”.
For verification of the local content requirement, Government has opted for a system of self-certification with penal conditions prescribed for the false declarations.In the certain cases, verification by the Statutory or Cost Auditors will also be required.
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