The government on Thursday decided to terminate the purchase preference policy (PPP) on products and services of state-run firms from March 2008. This is in order to provide private players with a level playing field and enhance competition.
The existing policy gives preference to central public sector entreprises (CPSE) in case of purchases made by government departments and other CPSEs. However, the Cabinet through an earlier decision limited the size of the contracts that does not exceed Rs 100 crore.
Speaking to reporters after the meeting, the information and broadcasting minister PR Dasmunsi said, ?The union Cabinet has given its approval to the earlier decision of the government that PPP for products and services of central public sector enterprises (CPSEs) will be terminated with effect from March 31 next year.?
He said CCEA has also asked concerned ministries and departments to independently evolve preferential policies for the sectors of their concern as per their requirement and convey the same to the Supreme Court.
?The decision will result in a level playing field between CPSEs and private sector players and increase competition,? Dasmunsi said.
The apex court on May 18 had directed that concerned ministries and departments should review the policy within four months from the date of the judgement. ?The SC has already been requested to extend the time for review as the matter involved consultation with various agencies,? he said. This policy for products and services of CPSEs has been in vogue since 1992.