India is emerging as the third largest economy in the world. Government procurement in the country represents a significant portion of its spending (estimated to be about 25 to 30 percent of GDP) and is a key determinant of budget execution outruns. Therefore, Public Procurement as an area of intervention is of great importance. Public Procurement by definition is the process of purchase of goods, works/construction and services by governments or public entities to fulfill the needs of the public authorities to carry out their responsibilities towards its citizenries. Since the Public Procurement Bill 2012, which was tabled in Parliament in May 2014, has lapsed with the dissolution of the 14th Parliament, the lack of an overarching law governing the Public Procurement in India has led to the subject being administered through a morass of rules set by different authorities, having no force of law.
At the moment, as far as the legal framework of Public Procurement in India is concerned, it has been governed by General Financial Rules (GFR), 2005, Delegation of Financial Power Rules (DFPR), 1978 and relevant guidelines of Chief Vigilance Commissioner (CVC) of India, High Court rulings and such diverse authorities have brought out directives on Public Procurement. So the matter is very chaotic and different organisations follow their own interpretation of various guidelines, leading to distortion of competition, lack of transparency and probity, which have in the past given rise to major incidents of diversion of public funds. Moreover, some of the recent procurement deals and controversies have brought in open the major failures in transparency, accountability, efficiency, competition and economy. It is, therefore, of utmost importance that the Procurement process overcomes the impediments of collusion, bid rigging, fraud and corruption.
Public Procurement Observatory: Need of the Hour
The World Bank (WB), after successfully trying the Public Procurement Observatory model in some countries, has come forward to implement this model in India with the objective of helping the state governments to enhance its Public Procurement practices and outcomes. In that backdrop, The WB has partnered with CUTS Institute of Competition and Regulation (CIRC, Delhi) to set a Procurement Observatory in Rajasthan at Jaipur, the state capital, which is an exigency. The Public Procurement Observatory will develop the Key Procurement Performance Indicators, collect and analyse procurement data, policies, rules etc. and the implementation of the same in the State. It will also share the findings and the best practices with the other state governments and other stakeholders through workshops, seminars, website and other such means.
Objectives
This observatory will impart public access to information and happenings in regard of current Procurement process, in order to ensure transparency and thus, trigger a mechanism of public watch. This intervention will enable learnings from past good experiences and path dependent developments in order to shed some light on the past failures and provide guidance for future reforms and innovations in the Procurement process in the State. Consequently, it will make the Procurement process cost-effective by advocating better practices for enhancing the process.
Timeline
The time period of the Project is of one year starting from November 20, 2014 to November 19, 2015 and under the project two state departments, Public Works Department (PWD) and Health and Family Welfare have been selected for the intervention based on the overall budget of the procurement and importance of the department.
Impact
The Procurement process of the selected departments is more transparent, accountable, ensuring fair competition among suppliers and contractors and boosting economy and efficiency on the whole Procurement system.