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Press Release AIMA Global Procurement Summit

Procurement efficiency of Finance Ministry is key to fiscal discipline: Expenditure Secretary

World Bank to include procurement as a criterion for ease of doing business ranking

10 February 2020, New Delhi

Dr T V Somnathan, Secretary, Department of Expenditure, Ministry of Finance has sought suggestions from experts to improve procurement efficiency of Government of India to improve fiscal discipline. “Efficient procurement is a precondition for timely execution of public projects,” he told a gathering of procurement experts at the Global Procurement Summit (GPS) 2020 this morning. GPS 2020 is organized by All India Management Association (AIMA) and it is supported by World Bank and Government of India.

Expenditure Secretary pointed out that 20% of India’s GDP is made up of government procurement and procurement is a strategic tool for achieving fiscal, economic and social objectives. He said that the current government has overhauled the procurement manual and technology.

The Secretary sought help from experts in designing public procurement contracts so that public private partnership (PPP) can be effective in delivering public infrastructure and services. He pointed out that PPP projects were affected by unanticipated events and issues that led to litigation and hold-ups. He said that arbitration had failed to prevent disputes from going to courts and contracts needed to be designed for dealing with unforeseen circumstances. “We need rigour without rigidity. We need fairness without inefficiency. We need transparency without paralysis,” he said.

World Bank’s Country Head for India, Junaid Kamal Ahmad underlined the importance of good procurement for success by citing the example of Bangladesh winning the Under-19 cricket world cup. He said that the credit for Bangladesh finally winning a global cricket trophy goes to a change in player procurement for the national team: ten years ago, all players in Bangladesh national team were sourced from two big cities - Dhaka and Chittagong - but now talent is sourced from all over the country.

World Bank will include procurement as a key criterion in the next ranking of countries on ease of doing business, according to Ahmad. “Procurement is a key indicator of efficiency of a government,” he said. He complimented India for its rapid rise in the ease of doing business rankings.

Building the state’s capability for efficient procurement was a key objective of World Bank, Ahmad said and referred to World Bank’s partnership with AIMA in offering diploma in public procurement as a key capacity building effort.

Federalism in procurement remains important for the sake of local capability and accountability, he said. He also argued for going beyond PPP and involving non-state actors in procuring public services. He gave the example of Delhi government’s partnership with non-state actors in improving public schooling in Delhi.

GPS 2020 is attended by delegates from India and overseas and it is being addressed by officials from many ministries and departments of Government of India and state governments. Experts from India and overseas are also presenting their suggestions and solutions at the event.