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Shining some light on public procurement in India

Shanker Lal's picture
 Photo: © Simone D. McCourtie / World Bank

In large, developing countries the government spends much of its budget on social safety net programs and building infrastructure, which involves procuring goods and services. But the ways in which these goods and services are purchased – the procurement process – can sometimes be inefficient and opaque to citizens. The procurement data is not easy to find or easy to understand; the policies are not always clear. In short, taxpayers often don’t know how their money is being spent.

In India, with help from the World Bank, there’s a promising initiative that is trying to address this problem, which is fundamentally one of transparency and accountability in government. But it is entering a critical new phase, in which it will need to become more self-sufficient and wean itself off of the initial World Bank seed funding.


The initiative centers around a set of small, civil society organizations called “procurement observatories” that have started collecting government procurement data and presenting it to the public in an understandable way. These observatories drill down into government data and information that is often kept in disparate places. Their job is also to demystify procurement policies and information around contracts and government purchasing.

Observatories are not a new idea. One of the earliest movers in this space was an organization called Public-Private Development Centre in Nigeria, which set up “Procurement Monitor.” It has put together training kits to develop a cadre of volunteer procurement monitors. This organization also reaches the general public through radio programs and accessible animated videos, such as this “National Cake” episode, in which a civil servant resists a request for information about procurement.

In India, the observatories are younger start-ups, and their models have evolved differently than the Nigerian one in important ways, including in their relationships with government. In India, the observatories aim to partner with the government, rather than act only as critical watchdogs. The Indian observatories are affiliated with management training institutions or civil society groups, and each takes its own approach to educating the public about procurement.

The National Procurement Observatory, for example, monitors federal procurement policies and performance. It presents analysis by experts on specific areas, such as trends in the railway sector, or the impact of “make in India” on procurement. In Rajasthan, the observatory conducts surveys to find out how much the public knows about procurement.

The U.P. Procurement Observatory, which is dedicated to the Uttar Pradesh (U.P.) state, has an interactive visualization tool that allows users to compare procurement trends in departments and states.

Collecting and processing all of this information has not been easy. One of the biggest challenges for the observatories in India has been access to data. Many states still use manual procurement, and even when they use e-procurement systems, it is not possible to get back-end data. But even this hurdle simply points to the great need for strong observatories that can promote open contracting.

Going forward, it will be important for the observatories to deploy the most appropriate indicators – not too many – for measuring the procurement performance. The observatories also need to improve their capacity to analyze and interpret data and policies.

They should not stop at accumulating data or compiling rules and regulation. The demystification of these policies and facts is key to their value. This is where the Indian observatories’ partnership model is important because it allows for constructive dialogue with the government, which in turn can facilitate faster improvements in procurement policies and performance.

Critically, these start-ups are entering a new phase. Their World Bank funding, designed to give them an initial boost, will come to an end now. They’ve got a good start: Cumulatively, they now achieve around 1000 website visits a month. But while their brand has been building, the next stage will be key. They will need to sustain themselves, either by providing priced products and services, or by seeking a more diverse range of financial support.

The five observatories supported by the World Bank in India

    National Procurement Observatory: This observatory has been set-up in 2015 by CUTS Institute for Regulation & Competition (CIRC), which is promoted by CUTS (Consumer Unity & Trust Society) International, a well-known civil society organization working for protection of consumer rights. This observatory monitors procurement policies and performance at federal government level. CUTS International had provided valuable inputs for formulation of draft procurement law of federal government, which is to be introduced in parliament shortly. The observatory website features expert comments on major federal government policies impacting public procurement, recent news and developments, repository of procurement rules and regulations and analysis of procurement data on key performance indicators (KPI). This observatory is also the knowledge partner of procurement learning portal

  U.P. Procurement Observatory: Uttar Pradesh (U.P.) is the largest state of India (in terms of population) and this observatory has been set-up in 2013 by Indian Institute of Management, Lucknow (IIM-L), which is a premier management and research institution of the country.  This observatory shares procurement rules, policies, blogs and other relevant documents pertaining to public procurement on its website for the benefit of government officials as well as civil society and taxpayers. This observatory has been collaborating within India as well as across the globe with leading institutions such as University of Hull (UK), University of Cincinnati (USA) and Federation University (Australia) for identifying good practices and popularizing them. The institution has contributed to Uttar Pradesh’s goods procurement policy; has provided capacity building support to improve PPP regime in the state and has provided consulting services to other Indian Government bodies to support their procurement process improvement initiatives. The observatory has been conducting workshops on relevant themes (last one was on how to improve competition in public procurement), where government officials are invited to share their experience and learn good practices.

  Rajasthan Procurement Observatory: Rajasthan is the largest state of India (in terms of area) and this observatory has been set-up in 2014 by CUTS Centre for Consumer Action, Research & Training (CART), which is a part of CUTS International. Apart from analyzing the procurement policies of the state government and commenting on the same, other notable activities of this observatories are to conduct citizen surveys about understanding of procurement rules/regulations in the state, conducting procurement training program for government officials and analyzing procurement performance of major spending entities of the state. This observatory also maintains repository of rules/regulations and good practices for the benefit of both government officials as well as civil society. The last dissemination workshop conducted by the Observatory attracted participation of about 135 from state government and civil society.

  Assam Procurement Observatory: Assam is the gateway to North-Eastern region of India and this observatory has been set-up in 2014 by Assam Institute of Management (AIM), a premier management institute. One of the important initiative of this observatory was to survey vendors to the state government to know their perception about procurement practices and also identify priority areas for further research. Other activities of this observatory are helping the state government in draft its procurement policy, develop network of procurement practitioners in the state and study best practices in grievance redressal and dispute resolution in public procurement in state government departments. This observatory has so far conducted three dissemination workshops, which were attended by a large number of government officials and other stakeholders.

  Chhattisgarh Procurement Observatory: This observatory was set-up by Indian Institute of Management (IIM), Raipur during 2013. One of the unique initiative of this observatory was to conduct a survey of procurement officials from the state. This observatory however could not ensure partnership with state government, due to which further activities were not undertaken. 
   
 
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Shining some light on public procurement in India
 

Comments

Submitted by Shivendra Kumar on

Setting up of the Procurement Observatories is an excellent move and would hopefully develop and spread further in the country. With time these could become store houses of a wealth of public procurement related information on the procurement policies, rules and regulations, statistical data on purchases, effects of preferential treatments in government purchases, level of transparency, health of our major procurement systems etc.

Basic availability of public purchase information and its collation into easily understood form, and dissemination to the public will itself go a long way in making the system more transparent, and better appreciated by the numerous stake holders.

I wish the observatories great success and am optimistic that they would be able to find resources for continuing with and expanding further this excellent initiative of the World Bank.

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