The Centre is working on comprehensive guidelines to reform public procurement in the country and avoid problems such as time and cost overruns, compromise with quality and irregularities, people familiar with the development said.
The exercise was started on the recommendation of the government’s anti-corruption watchdog Central Vigilance Commission (CVC), which underlined the need for a paradigm shift and systemic changes in view of the massive volume of public procurements in India.
A 20-member core committee comprising senior officers and engineers drawn from central government organisations first identified the problems with public procurement. Subsequently, a larger group comprising heads of public sector enterprises, banks, railways, defence, also shared its views on the changes required in public procurement policy.
“The matter has been further discussed with the Prime Minister’s Office (PMO), Niti Aayog, Comptroller and Auditor General (CAG) and the state governments, following which guidelines addressing the critical concerns in public procurement are currently under consideration of the government, which in turn will act as a facilitator for change,” said a government official, requesting anonymity.
Government officials stress that the exercise is crucial because of the size of public procurement in India. To be sure, there are no definitive estimates of the total size of India’s public procurement; most estimates put India’s public procurement at anything between 20 to 30% of Gross Domestic Product (GDP).
The hard push to carry out systematic changes in the public procurement policy has been taken after an analysis by CVC, one of the many conducted over the last decade, identified multiple concerns and challenges at various stages of procurement – tendering and contracting, estimation of rates, contract management, legal aspects in contracting, etc. The CVC analysis found instances of mis-tendering, cartelization, collusive bidding, bureaucratic hassles, dominance by firms through predatory pricing etc. From the vigilance point of view too, it was important to modify the procurement policy so that there is no mismanagement and irregularities, explained a second officer, who requested anonymity.
“The idea behind this exercise is to streamline the whole procurement process and have a detailed document to deal with the subject as there were small gaps,” said former Central Vigilance Commissioner Sanjay Kothari, who piloted the policy overhaul till he completed his tenure in June this year.