“A properly designed and implemented procurement law is long overdue. It can improve financial management, and bring large financial and governance benefits.” Elaborate and also examine what challenges need to be addressed in the implementation of such a law in India. (200 Words)
* Public procurement in India is about 30% of GDP and most vulnerable to corruption.
* Characterized by cartelization, rigging, monopoly, corruption, poor quality of procured goods and services etc.
Need of the hour is proper formulation and implementation of a public procurement law. Apart from reduction in corruption, ensuring access for government to best product and service at reasonable prices etc., it can bring in the following financial benefits :
* Fiscal Savings (0.6-1.2% of GDP as per the Bill) and hence added fiscal space
* Enhanced flexibility for government to channel expenditure into growth enhancing areas
* Shift towards rule-based institutional procurement
Challenges in Implementation :
* Enhancing data management capabilities and standardisation which will ensure transparency in public procurements.
* Need clarity regarding multiple references to ‘rules’ in the Bill which have led to confusion and ambiguity.
* Need to upgrade infrastructure (For e.g. IT Infrastructure for e-procurement) and the skill sets of the officials involved in procurement exercise in-line with best practices.
However, apart from these, certain other reforms like:
* Changes in the Procurement Bill like simplifying objectivity, including post-tendering steps within the ambit of procurement, designating a nodal agency for procurement etc.
* Strengthening CCI to check cartelization while procurement
* Adoption of Global best practices like OECD Guidelines In Public Procurement
These all steps along will go a long way in reforming the procurement process in India