COST AUDIT MIGHT HAVE HELPED ....NEW PROCUREMENT POLICY 2017

Cost Accountancy practicing profession is going to grow by leaps and bound provided the soldiers are focused towards the growth opportunities upcoming within the Indian industries. Practicing members and their hard work for several years have been a big boon to the profession and the green shoots of the same are now viewed . Those who are catering to the MSME segment as well as mid segment they will find stupendous growth coming as their turnover and volume of business will scale to an exponential growth over the next decade. The most silent thing which was approved by the government and was ignored due to GST focus is public procurement order 2017.

Indian is not the only country to have adopted Public Procurement order. Many countries and particularly keeping the international dumping and unfair trade practices in mind domestic companies have been empowered with this new policy. Now MSME segment will get growth as they are the one who will be benefitted more. What we all might have ignored is that Cost Standards and its report and data over the years and cost audit executed by the practicing members over the years might have helped the government to formulate this policy.  The best answere for this might be given by the ones who are on helm. What type of suggestion the Institute and its costing report have helped can only be answered by the CCM. But the practicing members have helped to identify the loopholes and imbalances of the economic factors within the economy and industry through their cost audit. Our cost accounting standards might have faced some hardships but it might have helped the government to formulate this policy.

Salient Features of the Policy

·         According to this order in case of tenders below Rs.50 lakh, only local suppliers will be eligible to bid.

·         In cases when the goods are divisible and the order is more than R50 lakh the vendors will be shortlisted on the basis of price.

·         In case the lowest price offer by the tenderer ( l1) is a local manufacturer or supplier, he will get the order. However in case it is not a local manufacturer, he will be given only 50 per cent of the order and the balance will be offered to the next in line local supplier.

·         In case goods are not divisible, the lowest bidder (non-local) will be given 50 per cent of the order. the local manufacturer will be given the opportunity to match the price of the lowest tenderer under certain conditions

·         Purchase preferences in case of other tenders, subject to any specific instructions given by the nodal ministry, will also be given to local manufacturers and suppliers of services, such that the minimum local content shall be at least 50 per cent.

Its tool which will give immense growth opportunities to the domestic companies who were ignored till date, will find substantial demand of goods. New technological innovation to reduce cost of production will also be attracted towards this sector. Cost Accountants needs to inform and strategies the business growth of their clients accordingly. Their work load will also increase as new orders and new growth opportunities opens up.

We are all busy with GST migration but this opportunity is long term benefit to the Indian economy and to the profession.  We need to have an open eye for these type of turn around and its our duty to inform the government at various point of time what type of improvisation is required for the Indian industries growth as well as to make them competitive in the global map. Practicing members are doing a great work but they needs to be part of every suggestion as well to be a part of the representation team. Gone are the days when only few selected CCM or RCM should represent the top brass of the Indian economy. When one moves as team it becomes more commanding.