States eye e-procurement (08th June 2006)

NEW DELHI: E-procurement is soon turning out to be the latest fad for state governments. Andhra Pradesh, which leads the way has clocked a e-procurement business of Rs 35,000 crore in the last two years, has netted a saving of Rs 5,630 crore on this count alone.

States such as Chhattisgarh, Gujarat, Assam, Rajasthan and MP are now about to join the e-procurement bandwagon. The AP government’s e-procurement scheme was used for sourcing construction material, hardware, pharmaceuticals and drugs since this scheme was launched two years ago. “The savings in comparison to manual procurement come to around 16% of total procurement,” Mr Raghuveer, additional secretary for e-procurement
AP government, told ET. “Generally, savings are higher initially.

But over time e-procurement is expected to lower costs by 10% for sure,” added Mr Bikshapati, e-procurement project manager, AP.

According to the World Bank figures, the Indian government is estimated to spend about $100 billion in public procurement each year. And a 10% cut in procurement costs would mean savings of around Rs 45,000 crore.

To exploit the full potential of digitalisation, cabinet secretary BK Chaturvedi has asked states to make e-procurement mandatory from April ’07. “Apart from costs, the time for inviting and processing tenders has also declined from 6 months to 36 days,” said Mr Bikshapati. It has also increased supplier participation as there are now 4.75 players per tender as against 3.5 earlier.

TIMES NEWS NETWORK