Rule 153 of The General Financial Rules 2017 Reserved Items and other Purchase Price Preference Policy
Original Rule Text
Visual Summary
Mandatory procurement from KVIC and Handloom Clusters for Central Govt. departments.
Governed by Section 11 of the MSME Development Act, 2006.
Government may mandate or prefer procurement from local manufacturers/service providers.
Executive Summary
Rule 153 of The General Financial Rules, 2017 outlines the Central Government’s policy on reserved items and purchase/price preference. It mandates exclusive procurement of Khadi goods from KVIC and at least 20% of handloom items from KVIC/Handloom Clusters. The rule also references the MSME procurement policy and allows the Central Government to issue notifications for mandatory procurement or preference for locally manufactured goods or services.
In-Depth Analysis of the Rule
Rule 153 establishes a framework for procurement that prioritizes specific categories of goods and services, reflecting the government’s commitment to supporting traditional industries and local manufacturing. This rule is crucial for understanding the social and economic objectives embedded within the financial regulations.
Breakdown of the Rule
- Khadi and Handloom Goods Reservation: The Central Government has reserved all hand-spun and hand-woven textiles (khadi goods) for exclusive purchase from the Khadi Village Industries Commission (KVIC). Additionally, Central Government departments must procure at least 20% of all textiles from handloom origin, exclusively from KVIC and/or Handloom Clusters (Co-Operative Societies, SHG Federations, JLG, Producer Companies, Corporations, etc., including Weavers with Pehchan Cards).
- MSME Procurement Policy: The rule refers to the procurement policy notified by the Ministry of Micro, Small and Medium Enterprises (MSME) under Section 11 of the MSME Development Act, 2006, indicating specific guidelines for procurement from MSMEs.
- Preference for Local Goods and Services: The Central Government retains the power to issue notifications for mandatory procurement or to provide preference to bidders based on the promotion of locally manufactured goods or locally provided services.
Practical Example
A Central Government department needs to procure uniforms for its staff. According to Rule 153, the department must first check if Khadi uniforms are available from KVIC, and if so, procure them exclusively from KVIC. For other textile items, at least 20% of the procurement must be from handloom sources like KVIC or recognized Handloom Clusters. Furthermore, if the government has issued a notification prioritizing locally manufactured uniforms, the department would need to factor this preference into its procurement process, even if it means selecting a slightly higher-priced local bid over a cheaper imported one, provided all other quality and specification requirements are met.
Related Provisions
Understanding Rule 153 is enhanced by examining other related rules within the General Financial Rules, 2017:
- Rule 144 of The General Financial Rules, 2017 Fundamental Principles of Public Buying: This rule lays down the overarching principles of efficiency, economy, transparency, and fair treatment in public procurement, which Rule 153’s specific preferences must align with.
- Rule 149 of The General Financial Rules, 2017 Government e-Marketplace (GeM): Details the mandatory use of the GeM portal for common use goods and services, providing the platform through which many of these procurement policies are implemented.
- Rule 154 of The General Financial Rules, 2017 Purchase of Goods without Quotation: Provides for simplified procurement procedures for low-value items, which might interact with the preference policies of Rule 153 when specific items are not available on GeM.
Learning Aids
Mnemonics
- Reserved Items Mandate Local Preference: Rule 153 focuses on Reserved Items, MSME policy, and Local Preference.
Process Flowchart
Multiple Choice Questions (MCQs)
1. According to Rule 153 of The General Financial Rules, 2017, what is the mandatory procurement requirement for Khadi goods by Central Government departments?
- A) At least 20% from KVIC
- B) Exclusive purchase from KVIC
- C) Optional purchase from KVIC
- D) Only if not available from other sources
Show Answer
Correct Answer: B) Exclusive purchase from KVIC
2. What percentage of handloom origin textiles is mandatory for procurement by Central Government departments as per Rule 153 of The General Financial Rules, 2017?
- A) 10%
- B) 20%
- C) 50%
- D) No specific percentage
Show Answer
Correct Answer: B) 20%
3. Rule 153 of The General Financial Rules, 2017 refers to the procurement policy notified by which Ministry under Section 11 of the MSME Development Act, 2006?
- A) Ministry of Finance
- B) Ministry of Commerce and Industry
- C) Ministry of Micro, Small and Medium Enterprises (MSME)
- D) Ministry of Textiles
Show Answer
Correct Answer: C) Ministry of Micro, Small and Medium Enterprises (MSME)
4. Under Rule 153 of The General Financial Rules, 2017, on what grounds may the Central Government provide for preference to bidders?
- A) Lowest price only
- B) Promotion of locally manufactured goods or locally provided services
- C) Fastest delivery time
- D) Bidders with international experience
Show Answer
Correct Answer: B) Promotion of locally manufactured goods or locally provided services
5. Which of the following is NOT a primary focus of Rule 153 of The General Financial Rules, 2017?
- A) Supporting traditional industries
- B) Promoting local manufacturing
- C) Streamlining international trade agreements
- D) Mandating procurement from specific categories
Show Answer
Correct Answer: C) Streamlining international trade agreements
Frequently Asked Questions
Q1: What is the primary objective of Rule 153 of The General Financial Rules, 2017?
A1: The primary objective is to promote and support specific sectors like Khadi, handloom, and Micro, Small and Medium Enterprises (MSMEs), as well as to encourage the procurement of locally manufactured goods and services by Central Government departments.
Q2: Does Rule 153 of The General Financial Rules, 2017 allow for any exceptions to the mandatory procurement from KVIC for Khadi goods?
A2: The rule states that all items of hand-spun and hand-woven textiles (khadi goods) are reserved for exclusive purchase from KVIC, implying no exceptions for these specific items.
Q3: How does Rule 153 of The General Financial Rules, 2017 support local industries?
A3: It supports local industries by mandating exclusive procurement from KVIC for Khadi, requiring a minimum 20% procurement from handloom sources, referencing the MSME procurement policy, and allowing the government to provide preference for locally manufactured goods or services through notifications.
Key Takeaways
- Rule 153 mandates exclusive procurement of Khadi goods from KVIC for Central Government departments.
- A minimum of 20% of all textiles procured by Central Government departments must be of handloom origin, sourced from KVIC or designated Handloom Clusters.
- The rule integrates the MSME procurement policy, as notified under the MSME Development Act, 2006.
- The Central Government can issue notifications to mandate or provide preference for locally manufactured goods and services.
Conclusion
Rule 153 of The General Financial Rules, 2017 is a pivotal regulation that steers public procurement towards supporting indigenous industries and promoting socio-economic objectives. By reserving items and providing preference, it ensures that government spending contributes to the growth of traditional crafts, small and medium enterprises, and local manufacturing, thereby fostering a more inclusive and self-reliant economy.