India needs a National Public Procurement Policy: CUTS

September 18, 2013, New Delhi
“Public procurement can be used as vehicle through which multiple socio-economic objectives can be achieved given that public procurement in India is worth US$ 536 billion”, said Bipul Chatterjee, Deputy Executive Director, CUTS International, in a Project Advisory Committee Meeting of the project on National Public Procurement Policy of India, held in New Delhi on 17th September 2013. “Such a policy will complement the objectives of the Public Procurement Bill, which has been tabled in the Indian Parliament, and will help in implementing this proposed law in a more effective manner,” he added.

This was the launch of the project which will be implemented over a period of two years beginning from August 2013, with the support of the British High Commission, New Delhi. It will explore interfaces between procurement policy and some other major macroeconomic policies such as competition policy, manufacturing policy, sustainable procurement, fiscal policy, trade policy and procurement by State governments.

Aurodeep Nandi, Senior Economic Adviser, British High Commission spoke about the value of having a public procurement policy and provided an overview of how the National Public Procurement Policy of India could further the objectives of a rules-based international economic systems. He highlighted that public procurement could be used to incentivise the transition to sustainable procurement practices in the country.

During this meeting, a presentation was made which provided an overview of the project and the research methodology to explore interfaces between public procurement and major macroeconomic policies and other issues such as supporting micro, small and medium sized enterprises, strategic sourcing, collaborative buying, public-private partnerships, post-contract management, e-Procurement and to address rent-seeking practices. The meeting brought out multiple insights from specialists in the field of public procurement from the government, industries and think-tanks, some of whom had sector-specific experience in pharmaceuticals, construction and information technology.

A number of experts from policy-makers to industry associations to academia participated in the meeting. Several suggestions came forth, for example, one of the experts shared that data collected on the Karnataka e-procurement portals was subject to analysis and the insights from the analysis allowed for a determination of patterns in supplier behaviour. In some cases the analysis also facilitated collection of information about the quantity of procurement of each product.

Another expert highlighted that despite any changes which may be effected at the policy level, the functionality may be derided through manipulation of ‘terms and conditions’ in procurement contracts and tenders. Some of the experts suggested that gender mainstreaming would be integrated into the policy to boost entrepreneurship by women.

They also suggested that owing to prioritising procurement for the lowest possible price, quality norms were frequently side-lined. Furthermore, it was highlighted that in order to incentivise manufacturing of new products specifically purchased by the government, there should be assurance of minimum procurement for suppliers of specific products in order to incentivise procurement. Such aspects are to be analysed and included in the policy.

CUTS suggested that case studies of the procurement of food, civil works and electrical equipment may be undertaken in order to provide sectoral insights on public procurement. While one of the experts advised including procurement practices of pharmaceuticals as it would provide valuable insights if analysed and also indicated that sources of information and data are readily available, another expert suggested that the procurement of services should be factored in the project work.

The gathering considered the critical question of whether achievement of multiple objectives apart from prioritising expenditure norms was feasible through this project. The concerns highlighted were that the implementation of the policy would impact procuring entities at the central government, state government and local government level apart from public sector utilities at all levels. These concerns will be addressed through stakeholder consultations, which will be held in different parts of India. A draft policy paper will be prepared for discussion among policy-makers, experts and other stakeholders of public procurement in India.

For more information, please contact:
Bipul Chatterjee, +91(0)9829285921,
Archana Jatkar, +91(0)9928207628,
Vinitha Johnson, +91(0)9829467314,