General Financial Rules 2025: 5 Game-Changing Reforms Boosting R&D Procurement

General Financial Rules (GFR)

India has reformed its General Financial Rules (GFR) in June 2025 to boost research and development (R&D) procurement. The changes aim to remove barriers created by rigid procurement processes like the Government e-Marketplace (GeM), which often delayed innovation and compromised research quality.

Key Points: General Financial Rules (GFR)

Issue with Previous System:

• Old GFR rules mandated GeM purchases for all R&D equipment below  Rs 200 crore.
• Scientists had to undergo a lengthy exemption process for specialized tools.
• Vendors on GeM often supplied low-quality materials, affecting research outcomes.
• Innovation was stifled as rules prioritized procedural compliance over scientific needs.

 Major Changes Introduced:

• Bypassing GeM for specialized equipment allowed for direct procurement by institutions.
• Direct purchase limit increased: from Rs 1 lakh to  Rs  2 lakh.
• Relaxation in rules aims to speed up research procurement and ensure better quality tools.

 Significance of Reforms:

• Encourages innovation-driven procurement rather than rigid, one-size-fits-all rules.
• Reduces administrative delays in acquiring global-standard scientific equipment.
• Aligns with global best practices by promoting innovation through public spending.

About General Financial Rules (GFR):

• GFR is a set of rules issued by the Ministry of Finance, Government of India to regulate financial management and procurement in government departments.
• Objective: Ensure transparency, accountability, and efficiency in public spending.
• Key areas covered:

• Budgeting and expenditure
• Procurement of goods and services
• Management of public funds

• Latest reform (June 2025): Specifically targeted at R&D procurement to support India’s innovation ecosystem.

Way Forward:

• Continuous monitoring to ensure quality and prevent misuse of relaxed rules.
• Development of specialized R&D procurement policies with global benchmarking.
• Capacity building for scientific institutions to handle procurement independently.

Encouraging collaboration with the private sector and startups to boost innovation.