MCA Secretary: Competitive procurement could result in cost saving to the extent of around 20-30%
rocurement, based on the principles of fairness, transparency and public interest, will protect the revenues of the State and make sure that they are used for optimal purpose, said the Union Minister for Finance and Corporate Affairs Arun Jaitley. Jaitley was delivering the Keynote Address at the National Conference on Public Procurement & Competition Law in New Delhi.
The Finance Minister, Jaitley, in his Keynote Address, further said that the competition regulator was created to ensure effective competition so that consumer interest could be protected. While talking about the roadmap for future, he stated that India needs to look at global models and visualise how to deal with emerging situations. Jaitley stated that public procurement being a very large part of the country’s GDP, the State is entitled to have the best price and quality and this also applies to all Statutory Institutions. The Finance Minister, Jaitley, said that there are areas in which tender bids can be global while in some areas, domestic development is desirable, especially in case of the service sector in which the effective competition needs to be build within the country itself. He said that with expansion of the economy, India's market expansion is going to have exponential growth and therefore, the role of the Competition Commission of India (CCI) as a Regulator will also expand with time. Size of the Service Sector, Industry and Manufacturing Sector will also increase, he added.
Earlier, CCI Chairperson, Sudhir Mital stressed on the importance of building a culture of competition in Public Procurement Systems in India.
He said that Free, Fair and Effective Procurement can reduce cost of delivery, free resources and make surpluses available, make the PSUs more competitive and allow the Public Sector to grow. He emphasised on the need for having a Pro-Competitive Procurement Systems that can reduce the scope of anti-competitive behaviour by the bidders. He also announced that the CCI is in process of Designing a Diagnostic Tool for public procurement agencies that would facilitate detection of bid rigging in public procurement as well as help design tenders which would promote fair competition. He also mentioned of a digital cartel detection software that the CCI is developing, following the international best practices.
Speaking on the occasion, Injeti Srinivas, Secretary, Ministry of Corporate Affairs stated that given the sheer volume of public procurement in GDP, which accounts for more than 26% of GDP i.e. equivalent to around Rs 28 lakh crore, it has a significant influence on the economy’s performance. He said that Competitive Procurement could result in cost saving to the extent of around 20-30% that could have long term impact on the economy. He added that there is a need to redesign the current PPP model to bring in efficiency and promote competition. He concluded by saying that competition is the single largest force for growth in a market economy.
In his address, Junaid Kamal Ahmad, World Bank’s India Country Director announced that contracting with the Government will be one of the new indicators to be considered by the World Bank in the next round of their Ease of Doing Business ranking. He stressed that improving competition in Public Procurement and e-procurement would facilitate market participation, expand business opportunities for a larger number of players and reduce their processing cost. He stated that India has adopted best global practices in Government e-marketplace which could be emulated by other developing nations.
IICA Director General and CEO, Dr Sameer Sharma concluded the Session by giving a brief summary of the points made by the speakers followed by a vote of thanks.
One day Conference was organised by the Competition Commission of India (CCI) in partnership with the Indian Institute of Corporate Affairs (IICA), a think tank under the aegis of Ministry of Corporate Affairs. The Conference is part of the series of Roadshows across the country on competition law and constitutes one of the major advocacy initiatives being undertaken by the CCI. The Conference sought to provide a unique platform to various stakeholders to engage in an active discussion on various competition issues relating to public procurement.
The Conference had two Open House Sessions related to the theme of Public Procurement. The First Session was on ‘Infusing Competition in Public Procurement’ and it was chaired by Karan Avtar Singh, Chief Secretary, Government of Punjab. The Second Session focused on ‘Bid-Rigging, Cartels and Leniency’, which was chaired by Augustine Peter, Member, CCI. The Open House Sessions were followed by a wrap-up session by Smita Jhingran, Secretary, CCI. The Conference was attended by the policymakers, participants from the industry, legal professionals, academicians and other relevant stakeholders. The Conference also witnessed display of various kiosks and screening of audio-visual clips related to the theme of conference.