Why in the News?

The Finance Ministry has announced new rules under the General Finance Rules (GFR) to give scientific Ministries more flexibility in importing and buying research equipment.
- These changes address scientists’ concerns about strict rules have slowed down research.

Changes introduced in GFR

The limit for buying goods without needing a tender has been raised from ₹25,000 to ₹1,00,000.
For goods priced between ₹25,000 and ₹250,000, a committee of three members must check the market for the best value and quality.
This limit has been raised from ₹1,00,000 to ₹10,00,000.

Note: These changes only apply if the goods are NOT available on the Government e-Marketplace (GeM).

The General Finance Rules (GFR) are a set of rules issued by the Government of India to regulate financial matters in public administration.
They provide a framework for financial management, ensuring accountability, transparency, and efficiency in the use of public funds.
The GFR were first issued in 1947, post-independence.
The rules have been revised multiple times, with significant updates in 1963, 2005, and the latest in 2017.
The GFR applies to all central government departments, ministries, and organizations funded by the government.

General System of Financial Management: Guidelines on budgeting, accounting, and auditing.
Procurement of Goods and Services: Rules for procurement, emphasizing transparency and competition.
Contract Management: Procedures for awarding, managing, and terminating contracts.
Inventory Management: Guidelines for managing government inventories and assets.
Grants-in-Aid: Procedures for providing grants to institutions and individuals.

Emphasis on e-procurement to enhance transparency and efficiency.
Use of the Government e-Marketplace (GeM) for procurement of common use goods and services.
Requirement for performance security in government contracts to ensure compliance and reduce risk.
Strengthening of internal controls and audit mechanisms to ensure compliance with rules and regulations.

The GeM is a one-stop National Public Procurement Portal to facilitate online procurement of common use Goods & Services required by various Government Departments / Organizations / PSUs.
It was launched in 2016 by the Ministry of Commerce and Industry.
It was developed by the Directorate General of Supplies and Disposals (under MCI) with technical support from the National E-Governance Division (MEITy).