The Competition Commission of India has asked Government departments to increase transparency in procurement practices. This is aimed at reducing the fiscal and revenue deficits.
The anti-monopoly watchdog said that officials should keep a tab on technical specifications and tender processes to ensure that there is a competition-compliant public procurement.
Globally, public procurement accounts for 15-20 per cent of GDP. In India, it accounts for about 30 per cent of the GDP. Key departments such as defence, railways and telecom, devote about 50 per cent of their budget to procurement, which happens to be higher than the expenditure of most of the State Governments. About 26 per cent of the health budget is devoted to procurement.
CCI Chairman Ashok Chawla said the Commission is conducting workshops with nodal officers of Central Ministries/ Departments on Competition Coherent Government Policies.
Stating that some industries are more susceptible, CCI said procurement agencies need to be vigilant when dealing with homogeneous products, a small number of suppliers and products with few or no close substitutes.
According to an OECD survey, developing countries can save 17-43 per cent through implementation of proper procurement processes.
CCI’s Economic Advisor Seema Gaur said both taxes and subsidies change the behaviour and incentives of firms that could well have an impact on competition in the market.
“In designing subsidies, policy makers should consider carefully both the degree of competition in the market and the way in which different approaches might affect this competition to minimise the potential negative impacts on competition,” she added.