Lok Sabha Question No. 260 (UNSTARRED), answered on 2026-02-02
Subject: Public Procurement Reforms and Financial Governance
Ministry: FINANCE
Asked by: Shri Vishnu Dayal Ram, Shri Vishweshwar Hegde Kageri, Smt. Kamaljeet Sehrawat, Shri Anil Firojiya, Shri Khagen Murmu, Shri Avimanyu Sethi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE LOK SABHA

## UNSTARRED LOK SABHA QUESTION NO. 260 TO BE ANSWERED ON MONDAY, FEBRUARY 2, 2026/ MAGHA 13, 1947(SAKA) 'PUBLIC PROCUREMENT REFORMS AND FINANCIAL GOVERNANCE'

260 Shri Vishnu Dayal Ram Shri Vishweshwar Hegde Kageri Smt. Kamaljeet Sehrawat Shri Anil Firojiya Shri Khagen Murmu Shri Avimanyu Sethi

## Will the Minister of Finance be pleased to state:

- (a) the  details  of  the  revision  undertaken  by  the  Government  to  the  public procurement manual and guidelines to improve efficiency, transparency, and ease of participation for suppliers;
- (b) the  steps  taken  by  the  Government  to  simplify  procurement  procedures  for Micro,  Small  and  Medium  Enterprises  and  to  promote  wider  competition  in Government procurement;
- (c) the  extent  to  which  the  adoption  of  digital  platforms  and  standardised procedures has reduced procurement timelines and administrative discretion; and
- (d) whether  the  Government  proposes  to  introduce  measurable  performance benchmarks  or  public  reporting  mechanisms  to  assess  the  effectiveness  of procurement reforms, if so, the details thereof?

## ANSWER THE MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a): Department of Expenditure, Ministry of Finance has over 2024-25 revised three procurement Manuals viz. Manual for Procurement of Goods (Second Edition, 2024), Manual for Procurement of Consultancy Services (Second Edition, 2025), Manual for Procurement of Works (Second Edition 2025). A new Manual for Procurement of NonConsultancy Services was also introduced in 2025. These Manuals are available at the Website of Department of Expenditure, Ministry of Finance @ doe.gov.in.

The  revised  Manuals  focus  on  ease  of  business  for  suppliers  and  clarity  for  the procurement  professionals.  A  wide  range  of  topics  have  been  rewritten  such  as clarifying  extent  of  applicability  to  various  entities,  categorisation  of  procurements, conflict  of  interest,  interest-free  advance  payments,  new  forms  of  performance securities, outsourcing procurement, auto-extension of bids, capping price variation and liquidated damages, mitigating cartel formation, reverse auction, rate contracts, withdrawal  by  L1  bidders,  Net  Present  Value  (NPV),  Procurement  during  Natural Disasters  etc.  Provisions  regarding  reduction  in  Performance  Security,  increase  in financial limits related to Public Procurement, reduction in Liquidated Damages and Guidelines for Arbitration and Mediation in Contracts of Domestic Public Procurement etc. have been incorporated.

(b): With the objective of promoting the growth and development of Indian Micro and Small Enterprises (MSEs) by improving their market  access and  linkages,  the Government of India had notified the Public Procurement Policy for Micro and Small Enterprises Order, 2012 under Rule 153(ii) of General Financial Rules, 2017.  The policy  mandates  25%  annual  procurement  from  MSEs  by  Central  Ministries/ Departments/ Central Public Sector Enterprises (CPSEs) including 4% from MSEs owned by SC/ST entrepreneurs and 3% from MSEs owned by Women entrepreneurs.

To reduce transaction cost of doing business, MSEs are facilitated by providing them tender sets free of cost, exempting MSEs from payment of Earnest Money Deposit (EMD). Additionally, 358 items have been exclusively reserved for procurement from MSEs.

The Ministry of MSMEs has launched MSME SAMBANDH Portal on 08.12.2017 to help  in  monitoring  the  implementation  of  Public  Procurement  Policy  for  Micro  and Small Enterprises Order, 2012. This portal is meant to serve as a bridge between the MSEs and the CPSEs by uploading necessary information relating to requirement of the CPSEs and the details of procurement made by them from the MSEs and help to ensure effective monitoring of the procurement on real time basis.

Ministry of MSMEs has reduced the Compliance Burden on business as well as on citizens related to Public Procurement Policy for MSEs Order, 2012 vide Notification No.  S.O.  3237(E)  dated  11 th  August,  2021  by  merging  04  compliances  into  one, reducing  the  number  of  compliances  from  07  to  04.  The  Central  Ministries/ Departments/ Central Public Sector Enterprises (CPSEs) require to take necessary steps to develop appropriate vendors by organising Vendor Development Programmes or Buyer-Seller  Meets  focused on  developing MSEs  for procurement through  Government  e-Marketplace  (GeM)  Portal.  For  supporting  MSEs  specially owned by SC/ ST and Women entrepreneurs, follow up communication with GeM is done on a regular basis by Ministry of MSMEs.

The  provisions  of  the  Public  Procurement  Policy  for  Micro  and  Small  Enterprises Order, 2012  have also been incorporated in the Procurement Manuals issued by the Department of Expenditure namely the Manual for Procurement of Goods - Second Edition, 2024, the Manual for Procurement of Consultancy Services (Second Edition, 2025) and the Manual for Procurement of Non-Consultancy Services, 2025. (c): Adoption  of  digital  platforms  has  decreased  procurement  timelines  and administrative discretion. For example in Central Public Procurement Portal (CPPP), the time taken from tender published (Open/Limited) till Financial Evaluation/ Award of Contract has gradually reduced from 64 days in 2021-22 to 37 days in 2025-26. Digital  platforms  have  also  facilitated  increased  bidder  participation  due  to  wider publicity, anonymity of participation and reduction of tender publishing costs leading to increased competition & transparency. (d): No such proposal is presently under consideration of the Ministry.

*****