Govt for centralised rules for public procurement

New Delhi, Nov 10: The Ministry of Finance is drastically revamping the public procurement procedures by putting in place a new system of centralised regulations with decentralised procurement systems, Joint Secretary in the Ministry of Finance S C Pandey said.

The government is also considering the suggestion received from industry associations to constitute Public Procurement Commission to facilitate settlement of any dispute that might arise on account of its new public procurement policy, Dr Pandey said while addressing a conference on Public Procurement organised by Assocham and World Bank here today.

He said the new system being considered by the government will also provide for independent public procurement mechanism separately for defence and railways and a General Monitoring Mechanism for other departments to ensure absolute transparency in procurement of government contracts.

Several inter-governmental meetings to evolve the newly centrally regulated system with discentralised procurement procedures have taken place in the past under constant monitoring of not less than the person other than Cabinet Secretary, said the Joint Secretary.

The general finance rules as regard to public procurements are also being constantly revised and modernised to suit the new requirements of the public procurement particularly when massive purchases will be made by the government during its Eleventh Plan period time in which 320 billion dollars are estimated to be spent on infrastructure purchases.

With the new revamped procurement mechanism, it would be ensured that a separate agency is created for defence purposes and the other one for railways as huge purchases are done in these two areas, said Dr Pandey adding that another independent agency would be set up to monitor the purchases of other departments.

The state government purchases would be regulated with a system that is evolved at central level for the purpose of ensuring fairness and transparency in all their deals, empowering the states to take their own independent decisions, he said.

World Bank India Operation Head Rachid Benmessaoud said government at the Union and State levels often spend 20 per cent of their overall budget on purchase of goods, works and services and even a marginal improvement in procurement efficiency has the potential for yielding impressive savings.

The importance of public procurements extends beyond its significance in overall spending. Public procurement is a prime place where budgets get translated into goods, works and services, a direct point of interaction between the public and private sectors and one of the internal government processes that is most visible to the general public.

''It is critical for the private sector in India to be pro-active in its efforts to support improvements in public procurement given the importance of the procurement system for private sector growth and dynamism'', said Mr Benmessaoud.

UNI