Prabhu urges CMs to select local goods in public procurement

New Delhi: Commerce and Industry Minister Suresh Prabhu has asked all chief ministers to formulate guidelines for giving preference to locally-made goods in public procurement with a view to promoting the manufacturing sector.

In his letter to chief ministers of all states, Prabhu said that giving preference to domestic manufactured goods will not only give a big boost to domestic manufacturing of goods and provision of supplies, but also lead to growth in employment and income. "I would like to once again stress upon the need for undertaking similar policy measures at state level and formulate appropriate guidelines for providing preference to locally manufactured goods in public procurement to provide impetus to local manufacturing," the letter said.

All the central government departments and agencies have been mandated to align their procurement procedures with the policy, it said. As states, union territories, public sector units, and autonomous bodies spend a significant amount on procurement of goods and services, similar policy measures at state level can provide an "additive thrust to the manufacturing sector in India, in line with the vision of Make of India," it added.

The minister sought cooperation of states in implementing the procurement policy.

The central government issued the order on June 15, 2017, to promote manufacturing and production of goods and services in India and enhance income and employment in the country. Under the Public Procurement (Preference to Make in India) Order, it was envisaged that all central government departments, their attached or subordinate offices and autonomous bodies controlled by the Government of India should ensure purchase preference be given to domestic suppliers in government procurement. It also provides 20 per cent margin of purchase preference, while the minimum local content required shall ordinarily be 50 per cent.

Meanwhile, Prabhu also said that the government will soon come out with a new agri export policy which would have provisions for setting up agro specific zones to boost outbound shipments.

The minister said India produces nearly 600 metric tonne (MT) of agri products including horticultural produce and its strategy is to increase farmers' income and reduce wastage of food products. He added that India is bestowed with the potential to produce all varieties of organic commodities due to the country's varied agro-climatic regions.