The Government of India has revised its General Financial Rules (GFR) in June 2025, easing procurement norms for research and development (R&D).
Procurement and Innovation
- Public procurement in India has traditionally focused on transparency and cost efficiency, often restricting R&D needs.
- Earlier rules mandated most purchases through the Government e-Marketplace (GeM), even for specialised scientific tools.
- This led to delays, poor quality supplies, and loss of valuable research time.
Key Features of the 2025 Reforms
- Exemptions from GeM: Institutions can now bypass GeM for specialised research equipment.
- Raised Purchase Limits: Direct purchase ceiling increased from ₹1 lakh to ₹2 lakh.
- Greater Autonomy for Institutions: Vice-chancellors and directors can approve global tenders up to ₹200 crore.
- Balanced Oversight: Departmental purchase committees remain for high-value procurements to maintain accountability.
Significance of the Reforms
- Encourages Faster Research: Reduces bureaucratic delays in procuring critical instruments.
- Promotes Innovation: Supports customised tools needed for cutting-edge research fields.
- Aligns with Global Trends: Moves closer to models where procurement acts as a driver of innovation, not just cost control.
- Supports Private Sector R&D: Stable demand from public institutions can encourage private companies to innovate.
Global Best Practices
- Germany: Uses procurement under its High-Tech Strategy to promote innovation; supported by an advisory body (KOINNO).
- United States: SBIR program reserves funds for startups, using phased procurement to support early-stage technologies.
- South Korea: Runs “pre-commercial procurement” paying premium prices for prototypes that target ambitious research goals.
Challenges Ahead
- Direct purchase limit still low for advanced fields such as biotechnology or quantum computing.
- Risk of misuse: More autonomy requires strong ethical standards and monitoring systems.
- Domestic industry concerns: Global tenders may sideline local suppliers unless domestic R&D is strengthened.
Way Forward
- Introduce outcome-based tenders, evaluating quality and innovation, not just cost.
- Provide sandbox exemptions to top institutes for flexible procurement.
- Use AI-based tools to track suppliers, predict delays, and cut decision time.
- Encourage co-procurement alliances among labs for costly equipment.
GOVERNMENT E-MARKETPLACE (GEM):
Gem is an online platform for government departments to buy goods and services directly from sellers.
- Purpose: Makes public procurement faster, transparent, and efficient.
- Who Can Use : Government buyers and registered sellers can trade on the platform.
- Benefits: Reduces middlemen, ensures fair pricing, and improves accountability.
- Features: Offers digital payment, product comparison, and user ratings for better decision-making.
- Impact: Helps small businesses and startups sell to the government easily.
Conclusion
The 2025 reforms shift procurement from cost control to innovation, giving institutions more flexibility. With oversight and local R&D support, they can speed up research and boost India’s innovation capacity.
