Reforming India's public procurement rules to foster research, development, and technological innovation
India's General Financial Rules (GFR) and the Government e-Marketplace (GeM) portal, while designed for transparency, often hinder R&D due to rigid procurement processes. Recent reforms in June 2025 aim to address this by allowing institutions to bypass GeM for specialized equipment and raising direct purchase limits. The article suggests further reforms, such as outcome-weighted tenders, 'sandbox' exemptions for premier institutes like TIFR or IITs, and AI-augmented sourcing. Emulating international models like the US SBIR or South Korea's 'pre-commercial procurement' could transform procurement from a cost-control mechanism into a catalyst for innovation.
Key Points
- Rigid procurement rules often prioritize cost-efficiency over the specific needs of high-tech research and development.
- Recent reforms allow institutions to bypass GeM for specialized equipment and increase direct purchase limits from ₹1 lakh to ₹2 lakh.
- The article advocates for 'mission-oriented procurement' where the state deliberately shapes technological markets.
- Proposed solutions include AI-driven procurement assistants and co-procurement alliances to aggregate demand for expensive equipment.
Exam Facts
- General Financial Rules (GFR).
- Government e-Marketplace (GeM) portal.
- Direct purchase limit increase: ₹1 lakh to ₹2 lakh.
- US Small Business Innovation Research (SBIR) program.
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