India’s Ministry of Finance has rejected a proposal by the Steel Ministry to establish a central organisation for the bulk procurement of green steel, government sources said on Thursday, December 26.
It cited that most steel procured for government projects is purchased indirectly through contractors rather than directly by the government, the sources said.
Government agencies are one of the largest procurers of steel and cement, primarily for large-scale construction projects. Similarly, in India, public procurement accounts for at least 20 percent gross domestic product (GDP).
In the course of announcing the first ever definition of ‘green steel’ the Ministry of Steel had said that it was planning to mandate that 37 percent of all future steel procurement for government project will be green steel to lower carbon emission intensity.
While the government may go ahead with the proposal, the Ministry of Finance does not think that implementing this mandate through a single centralised agency to act as a procurement agency for all projects will be feasible and violate against competitive legal framework.