The Union Ministry of Finance. File
| Photo Credit: SHIV KUMAR PUSHPAKAR

Ahead of the presentation of the Union Budget, the Finance Ministry has announced changes that will provide greater flexibility to scientific Ministries to import and buy equipment necessary for research.

These changes, in the General Finance Rules (GFR), follow demands made for years by scientists, who have often said that restrictive rules on the purchase of research equipment had slackened the pace of research productivity.

The GFR, which are prescribed by the Finance Ministry, define the conditions under which public procurement is conducted, and they are periodically updated. The new exemptions are specific to the “scientific Ministries”, and include the Department of Science and Technology, Department of Biotechnology, Department of Scientific and Industrial Research, Department of Atomic Energy, Department of Space, Ministry of Earth Sciences, Defence Research and Development Organisation, Indian Council of Agricultural Research, Department of Health Research including Indian Council of Medical Research, and institutions conducting post-graduate research affiliated to Ministries.

The first of the changes are in raising the threshold price of goods that may be bought without going through a tendering process. Until May 20, when the relaxations came into effect, the threshold was ₹25,000. It has now been raised to ₹1,00,000.

The second is that for goods priced between ₹25,000 to ₹250,000, a purchase committee consisting of three members nominated by the Head of Department must survey the market to establish that it offers the most value for money and quality. That limit has now been raised from ₹100,000 to ₹10,00,000. However, and this is the catch most scientists are not quite happy with, these relaxations are only applicable once it is established that the required goods are unavailable on the Government e-Marketplace (GeM). The GeM is a government mandated website, such as the Amazon online marketplace, which lists sellers of India-made or assembled goods, and is administered by the Ministry of Micro, Small and Medium Enterprises. A general grouse against the use of GeM, particularly by scientists and researchers, is that they often need extremely customised equipment which often has to be imported, and may otherwise compromise the quality of research experiments.

“The increased upper limits are certainly welcome but the overall processes remain unchanged. For example, we cannot avoid GeM. For scientific institutions, we need a completely different set of guidelines, and this has been communicated by various bodies, including the Principal Scientific Advisor’s Office to the Finance Ministry,” L.S. Shashidhara, Director, National Centre for Biological Sciences, Bengaluru, said.

A senior official who is part of the scientific bureaucracy in India said on condition of anonymity that of the six demands presented to the Finance Ministry, four had been met, and there was a fair chance they would be reconsidered in the future. “The Finance Ministry is open to suggestions but they have a more holistic view. GeM is brought in to prevent misuse,” the official said.

Union Finance Minister Nirmala Sitharaman presents the Union Budget 2023-24.
| Photo Credit: ANI

The Union Budget 2023 presented in the Parliament by Finance Minister Nirmala Sitaraman has come as a disappointment to the Telangana government which claimed that “there is nothing particular about Telangana”.

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Finance Department officials termed the Budget as “business like” and said the Centre had in fact reduced the outlay for national rural employment guarantee scheme at a time when the State was asking for enhancement of mandays under the scheme. “There are of course some positives such as focus on capital expenditure and fiscal consolidation, but most of the State’s demands remained unconceded,” they said.

A senior official said the incentive of enhancement of 0.5% fiscal deficit to States was of no big use to the State as it is anyway not participating in the power sector reforms as mandated by the Centre to avail it.

Strong pitch made by Finance Minister T. Harish Rao to bring down the share of cesses and surcharges as a percentage of gross tax revenue to a level not exceeding 10% remained unfulfilled.

The State expressed concern during the pre-Budget meetings convened by the Union Finance Ministry that its interests are being compromised with the increase in recourse to levy of cesses and surcharges by the Centre claiming that tax devolution to States as percentage of gross tax revenue of the Centre worked out to 29.7% in 2022-23 as compared with the share of 41% recommended by the XV Finance Commission.

“Thus, increase in the amounts collected through cesses and surcharges has not only compromised the recommendation of the Constitutional institution but also the interests of States,” Mr. Harish Rao lamented. There was, however, no announcement forthcoming in the Union Budget regarding redressal of the grievance raised by the State.

The Union Finance Minister did not also make any mention about the State’s request to make applicable the decision to prospectively treat the off-Budget borrowings raised by the State public sector corporations serviced out of the State Budget as State borrowings from the next fiscal year.

Regarding the Centrally sponsored schemes, Mr. Harish Rao said: “We request that apart from reducing the number of schemes, a State should be given the option of selecting a few schemes which suit its requirements. This will be in the interest of promoting cooperative federalism.” Ms. Nirmala Sitaraman, however, did not touch upon the subject during her speech in the Parliament.

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Another area of concern for the State has been the non-implementation of the promises made in the A.P. Reorganisation Act 2014 mandating the Centre to take fiscal measures including offer of tax incentives to promote industrialisation in the State.

Officials said so far, no major tax concessions have been offered to the State with exception of minor concessions in the depreciation rate.

The persistent demand for according national project status to Kaleshwaram project also went in vain as the Union Finance Minister did not touch upon the subject in her speech.