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General Financial Rules:

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

General Financial Rules:

Context:

The government has amended the General Financial Rules, 2017, imposing restrictions on public procurement from bidders of countries that share a land border with India, citing grounds of defence and national security.

  • The central government has also directed state governments to implement this order for all public procurement.

As per the amendments:

Bidders from these countries will be eligible only if they are registered with the Registration Committee constituted by the Department for Promotion of Industry and Internal Trade (DPIIT).

They will also be required to take mandatory political and security clearance from the ministries of External Affairs and Home.

Exceptions:

Relaxation will be provided for procurement of Covid medical supplies till December 31.

Also, the order for prior registration will not apply for countries to which the government extends lines of credit or provides development assistance, even if they share a land border with India.

Background:

These measures follow a series of steps that have been taken in recent months to prevent influx of Chinese products and investments into India.

On June 23, the government made it mandatory for sellers on the Government e-Marketplace (GeM) portal to clarify the country of origin of goods when registering new products.

In April, the government amended FDI rules mandating prior approval for investment by entities in countries that share land borders with India.

What are GFRs?

They are set of rules that deal with matters that involve public finances.

They were first issued in 1947 bringing together all the existing orders.

They are instructions that pertain to financial matters.

  • They lay down the general rules applicable to Ministries / Departments, and detailed instructions relating to procurement of goods are issued by the procuring departments broadly in conformity with the general rules, while maintaining flexibility to deal with varied situations.

Sources: pib.