Examine the provisions of Public Procurement (Preference to Make in India), Order 2017. How it encourages manufacturing and 'Make in India'?

Published: January 3, 2018

Government of India issued a Public Procurement (Preference to Make in India), order in June 2017 with an aim to encourage the Make in India project.The Make in India project was launched in 2014 to improve the manufacturing sector’s contribution to the nation’s GDP. Make in India is a tool to enhances the employment and income conditions of the country. 

  • The key provision of the order is, the minimum local content in any procurement should ordinarily be 50%. This provision is created to encourage the domestic producers. Purchase preference shall be given to the local suppliers by the public procurement entities.
  • In cases of procurement of goods below Rs. 50 lakhs, if sufficient goods are available in the local market with adequate local competition, the nodal ministry can declare that the procurement should be done only from the local suppliers. 
  • When the local capacity is not adequate in cases of procurement of above Rs. 50 lakhs, the lowest local bidder will be given a margin of 20% to match the non local supplier’s bid.
  • There is a provision to split the procurement between local and non local suppliers if the conditions arise so.
  • Any false declarations made by the suppliers are subject to legal penalisation. This provision is added to weed out the bogus supplier contracts.
  • A five member committee headed by the secretary of DIPP constituted to oversee the implementation of this order.

The order aids in boosting the domestic manufacturing. It also helps in flow of capital and technology into the country’s manufacturing and service sector. Make in India is launched to create millions of jobs in the country along with the aim to boost the GDP contribution.

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