The Prime Minister's Office has admonished departments, ministries and public sector units for not being supportive enough of the 'Make in India' programme by imposing bid conditions regarded as discriminatory toward domestic manufacturers.
Companies such as Larsen & Toubro and state-owned BEMLBSE -3.83 % are among those that objected to such terms.
"It is very disturbing that the broad message has not been appreciated by various departments," the PMO said in aletter after the Department of Industrial Policy and Promotion raised the issue.
ET has seen a copy of the letter. Following the PMO's instructions, DIPP issued a directive to secretaries of all departments to "ensure the tender conditions are strictly in sync with the public procurement order... Any tender which is not sensitive to 'Make in India' message deserves scrutiny".
The government is betting big on manufacturing through 'Make in India' to create millions of jobs that the country needs to revive growth, lift incomes and eradicate poverty. It has created 25 focus sectors under the initiative including automobiles, textiles, construction and aviation to make India a part of the global supply chain. The National Manufacturing Policy seeks to raise the contribution of manufacturing to GDP to 25% by 2025 from 18% now.
Domestic firms had pointed out what they regarded as the unfairness of bid terms at a recent meeting of the Standing Committee for Implementation of Public Procurement Order 2017. DIPP brought these to the attention of PMO.
'Arbitrary Conditions'
BEML, which makes rail cars, has not been able to bid for a Mumbai Metro project due to a condition requiring the bidder to have 130 coaches in service for five years. BEML has manufactured 1,200 coaches but has only been doing so for three years.
"These are arbitrary conditions and these very specific numbers have not been justified by the department concerned," a senior government official told ET. "Such practices have been going on for years and it is for the first time that the government is calling for an urgent review to fix these glaring problems."
Larsen & Toubro raised concerns regarding a tender for finalising an engineering, procurement and construction (EPC) contractor for Talcher Fertilisers. This stipulated experience of setting up an ammonia and urea fertiliser project in the past 20 years when there has been no such greenfield project in India in that period.
The department of fertilisers told the standing committee that the project will be re-tendered with modified conditions.
The standing committee also found that Rail Vikas Nigam Ltd, a unit under the railway ministry, had specifically called for products of three foreign manufacturers. Similarly, in the procurement of medical devices, many hospitals including those under central control have made US Food and Drug Authority (FDA) approval mandatory in tender documents.
"It can be made a sufficient condition but making it mandatory is untenable," said the official cited above. The ministry of health is expected to issue a regulation on medical devices in January 2018 and consider the issues raised by concerned stakeholders.
The cabinet had in May 2017 approved a policy requiring purchase preference to domestic suppliers in all public procurements and 50% of value addition being made locally. DIPP has formed a Public Procurement Cell to ensure implementation of the policy and provide a platform for domestic manufacturers to air concerns.
Source : economictimes.indiatimes.com