1. National Public Procurement Policy of India
Project Advisory Committee Meeting
17th September 2013

2. Project Overview Goal To develop a national public procurement policy
Need for Procurement Policy
To allow for efficacious expenditure of approximately US$ 536 billion
Rationale
Governments around the world utilise procurement to:
stimulate local manufacturing capacities and employment;
promote competition in the marketplace;
adhere to good fiscal practices;
promote sustainable production and consumption practices
Time Frame
August 2013 – March 2015

3. Objectives To develop a procurement policy with two objectives:
Judicious use of public expenditure
Achievement of socio-economic developmental goals
To study interfaces between macroeconomic policies and procurement so as to:
allow policy-makers to react to changes in macroeconomic indicators
calibrate public expenditure to balance conflicting objectives
Inclusion of socio-economic objectives such as
enhancing participation of SMEs
moving to green procurement and sustainable procurement
mechanisms to benefit disadvantaged classes

4. Instances of Interfaces with procurement
Country
Competition
policy
Manufacturing/Innovation
Fiscal
Trade
Sustainable Procurement
Decentralised Procurement
Social Issues/ SMEs US ✓
n/a EU UK
Japan
China
South Africa
Australia
Canada
Switzerland
Sweden
Brazil
Mexico
Malaysia
Netherlands
Belgium
Germany
France
Denmark
Note: Social Issues includes preferential procurement.

5. Identifying Interfaces with Procurement: Major Macro-Economic Policies
Competition Policy
Manufacturing Policy
Sustainable Procurement
Fiscal Policy
Trade Policy
Procurement by State Governments
The objective is to enable ‘policy bundling’ of the aforementioned macroeconomic policies with procurement.

6. Identifying Interfaces with Procurement: Cross-cutting issues
Ascertain the viability of balancing multiple objectives
Socio-economic objectives
Incentivising Small and Medium Enterprises
Strategic sourcing
Collaborative buying
Public-private partnerships
Post-contract management
e-Procurement
Eliminating corrupt practices in tendering

7. Competition and Public Procurement
Theoretical Base
Types of procurement, optimal design of bidding for different requirements, OECD documents on anti-competitive practices in procurement
Methodology
Use literature review to identify common anti-competitive practices
Undertake surveys to identify anti-competitive practices prevalent in India
Identify best practices and adapt them for use in India
Final Output
A guidance document which allows procuring entities to identify prevalent anti-competitive practices

8. Manufacturing and Public Procurement
Theoretical Base
Facilitating import substitution, encouraging innovation, using global value chains, supporting small scale industries
Methodology
Identify critical products in which India needs to build manufacturing capacity
Frame a government procurement strategy which encourages moving up the value chain
Final Output
Formulate a methodology which does the following;
Undertake a ‘spend analysis’ for ministries
Identify products being procured maximum
Identify local production capacity and potential to move up the value chain

9. Fiscal Policy and Public Procurement
Theoretical Base
Efficacious Public Financial Management
Effective use of fiscal policy to incentivise manufacturing
Fiscal federalism and decentralisation
Fiscal responsibility
Methodology
Determine the effectiveness of the operation of the Central and State Fiscal Responsibility legislations
Critique flow of finances from Centre to State and Local Governments
Final Output
Identify and report cases where government expenditure should be calibrated with changes in fiscal and monetary policy
Propose changes to Fiscal Responsibility legislations
Fiscal policy (in tandem with public procurement to incentivise manufacturing in manufacturing clusters

10. Trade Policy and Public Procurement
Theoretical Base
WTO GPA
Chapter on Government Procurement in Free Trade Agreements
Non Tariff Barriers maintained to limit market access opportunities
Methodology
Study the possible impact of the EU-India FTA Chapter on Government Procurement
Evaluate current Foreign Trade Policy
Final Output
Suggest strategies to negotiate chapters on Government Procurement in FTAs
Suggest alterations in the Foreign Trade Policy
Coalesce Public Procurement with Trade Policy
Theoretical Base
Practices undertaken in other countries
Methodology
Final Output

11. Procurement by State Governments and Local Entities
Theoretical Base
Examples of federal procurement policies (Queensland Public Procurement Policy, Jharkhand Public Procurement Policy (Draft) 2013
Degree of autonomy in public procurement by sub-federal entities (Canada, United States)
Methodology
Understand how effective decentralisation of procurement occurs
Study the practice of formulating and implementing procurement policies by specific entities (Queensland Rail, San Mateo Country environmental purchasing policy)
Final Output
Provide a mechanism for decentralisation of public procurement priorities to different levels of procuring entities (State, Public Sector Utilities, Local bodies)

12. Sustainable Procurement
Theoretical Base
Life cycle approach
Using labelling to identify whether a product is ‘green’ or ‘sustainable’
Identification of specific sectors/products which are best suited for sustainable procurement
Facilitating development of production capacity of sustainable products through the ‘spillover effect’
Methodology
Undertake ‘needs assessment’ (for Central Government, State Governments
Interviews/surveys will be conducted to determine if sustainable procurement of identified products can be cost-effective in India
Final Output
List of products/processes for which production capacity should be increased
Methodology to assess the cost of procuring a product over its lifetime

13. Issues for discussion
Which of the following should be identified as independent case studies?
Central Government Ministries and Departments
Directorate General of Supplies and Disposal
Centrally Planned Schemes
Tenders documents in Specific Sectors
Suggestions pertaining to data-repositories
Individual Sector Studies
Procurement of Food
Procurement of Electronic Equipment
Procurement of Civil Works
Specific sources of data at a disaggregated product level

14. Facilitating Effective Stakeholder Engagement
Public Procurement Division, Department of Expenditure
Central government departments/ministries (including PSUs and State government ministries)
Industry Associations
Regulatory Bodies
Civil Society Organisation
Foreign Industry Representations/ Companies
Academia
How do we facilitate consensus-building amongst the identified stakeholders for a National Public Procurement Policy of India?

15. Thank You!