Centre lifts ban on purchase of new cars by government departments

New Delhi: The auto sector is set to get a boost as Prime Minister Narendra Modi-led central government has lifted the ban on the purchase of new cars for its departments.

The official communication to lift ban on the purchase of vehicles by government departments was issued by the government.

Also, the order was sent to the cabinet secretary, finance advisors to all ministries and departments, principal secretary to Prime Minister and to vice-chairman NITI Aayog for implementation.

The lifting of ban comes days after Union Finance Minister Nirmala Sitharaman promised measures to provide relief to the slowing down sector in the economy.

In the order issued, it is stated that the decision is "pertaining to economy measures and rationalization of expenditure." According to officials, an earlier order about the purchase of cars by the government had put a ceiling on the cost of the vehicle that can be bought and also made it mandatory to buy these cars only through Directorate General of Supplies and Disposals.

The new order has brought in flexibility of buying cars as and when need arises.

"Purchase of new vehicles to meet the operational requirement of Defence Forces, Central Paramilitaty Forces & security related organizations are permitted.

Ban on purchase of other vehicles (including staff cars) will continue except against condemnation. Consequent to the aforesaid condition, all proposals relating to purchase of vehicles by Ministries/Departments other than those against condemnation were being made with the concurrence of the Department of Expenditure," the order stated.

It further added, "The matter regarding ban on purchase of vehicles (including staff cars) except against condemnation has been reassessed and examined by this Department.

I am directed to state that the ban on purchase of other vehicles (including staff cars) except against condemnation stands withdrawn with immediate effect.

The purchase of new staff cars on requirement basis including against condemnation will continue to be regulated within the ceiling fixed by the Department of Expenditure from time to time.

Purchase of vehicles other than staff cars for operational need is also allowed." The order also stated that that ministries and departments in consultation with their financial advisers shall ensure that all purchases of vehicles are made judiciously keeping in mind the principle of "need" and want.

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