Tue. Jul 23rd, 2024

Punjab, with a population of 31,623,274 people, covers an area of 50,362 square kilometers (19,445 square miles), representing 1.53% of India’s total geographical area and ranking as the 19th-largest Indian state by area out of 28 states. Punjab holds the 16th position in terms of population among Indian states. The Gross State Domestic Product (GSDP) for Punjab in the fiscal year 2023-24 is Rs.6.98 lakh crore, marking a 9.5% increase over the previous year’s GSDP in 2022-23. While India’s GSDP growth hovers around 6 percent, Punjab emerges as a rapidly growing state with a growth rate of 6.98 percent. A considerable portion of the government’s spending is dedicated to procurement, and here is an examination of the procurement expenses in the state of Punjab.

The primary source of funding for procurement is the budget, and additional funding for procurement is sourced from Public Sector Undertaking (PSU) entities. For the fiscal year 2023-24, Punjab’s government budget is Rs.1,96,462 crore, representing a significant 22% increase from the previous year’s total budget expenditure of Rs.1,55,860 crore in the fiscal year 2022-23. In Punjab, 38 PSUs generate revenue through service provision, utilizing these funds for the procurement of goods, project implementation, and service acquisition. Some notable PSUs include Punjab Financial Corporation, Punjab State Warehousing Corporation, and PEPSU Road Transport Corporation.

Within the total budget of Rs.1,96,462 crore, a dedicated allocation of Rs.74,620 crore is allocated to committed expenditure, making up 37.9% of the overall budget. The committed expenditure of the Punjab Government on the revenue account primarily includes interest payments, salaries, pensions, and subsidies. A significant portion of the remaining 62.1% is reserved for procurement. Additionally, PSUs contribute to procurement expenses. Assuming that procurement constitutes 10% of the GDP, the estimated procurement expenditure by the Punjab government is approximately Rs.70 thousand crore.

Out of the total Punjab government budget of Rs.1,96,462 crore, the capital outlay is Rs.10,355 crore for the fiscal year 2023-24. Government capital outlay encompasses expenditures on equipment, machinery, land, plant, buildings, warehouses, furnishings and fittings, business vehicles, and software. It also includes civil works procurement for new roads, bridges, drainage systems, as well as large-scale infrastructure projects like dams, stadiums, airports, and harbors. Many government projects require significant investment, and the government may obtain loans from agencies such as the World Bank and the Asian Development Bank. The current capital outlay reflects a 22% increase from the previous year.

The Punjab state government operates 41 departments involved in procuring a range of goods, works, and services. Rural development initiatives in Punjab are managed by entities like the Department of Local Government and the Department of Rural Development and Panchayats. Municipalities and district administrations handle procurement at the local government level. As of 2023, Punjab has 5 municipal corporations, with Ludhiana being the largest in terms of both area and population. The state comprises 23 districts, with Bahawalpur holding the distinction of being the largest district in Punjab by area.

The Punjab government has allocated 13.1% of its total budget expenditure to the education sector. This funding encompasses various aspects such as the distribution of educational kits, provision of uniforms, and supply of hostel items. Additionally, financial resources are directed towards civil works, including the construction and maintenance of school buildings. The responsible agencies for overseeing these expenditures include the Department of Medical Education and Research and the Department of Higher Education.

Allocating 10.2% of its overall budget expenditure, the Punjab government directs substantial funds to the agricultural sector. This financial commitment serves a diverse range of purposes, including the purchase of seeds, distribution of fertilizers, procurement of manures, and the acquisition of drip irrigation equipment. Additionally, provisions are made for civil works, encompassing the construction and maintenance of agricultural buildings, greenhouses, and polyhouses. Oversight of these financial allocations is vested in agencies such as the Department of Agriculture and the Directorate of Agriculture and Farmers Welfare.

Within the Police sector, Punjab has earmarked 6.4% of its overall budget expenditure. These funds serve diverse purposes, ranging from acquiring a Human Identification Kit, providing DNA Kits, and purchasing Air Conditioners to procuring Computer equipment. Additionally, the allocation extends to civil works, encompassing the construction and repair of police stations, office buildings, and the Police Guest House. The Department of Police Punjab and the Punjab Police Housing Corporation Limited (PPHCL) oversee the management of these initiatives.

In the health sector, Punjab has designated 4.2% of its total budget expenditure. These funds are utilized for various purposes, including the purchase of medical equipment, provision of veterinary equipment, and procurement of drugs. The allocation also covers civil works, such as the construction and repair of medical hospital buildings, dispensary buildings, and veterinary hospital buildings. Additionally, services like hospital sanitation are included in the expenditure. These initiatives are managed by agencies like the Health and Sanitation Department and the Department of Health and Family Welfare (DoHFW).

In order to ensure transparency, the government is mandated to adopt an open tendering process for procurement, widely disseminating these tenders through eProc Punjab and various web portals. As of December 7th, 2023, Tendersniper portal indicates over 5000 live Punjab tenders. Analyzing these tenders offers insights into the government’s spending priorities. The highest expenditure area in Punjab is unit paver construction, with 156 tenders, primarily published by the Department of Local Government and Department of Agriculture. The second-highest spending category is hospital construction, with 140 tenders, mostly published by the Department of Health and Family Welfare (DoHFW), Department of Rural Development and Panchayats and Water Supply and Sanitation. Canal strengthening takes the third spot with 129 tenders, largely advertised by the Department of Water Resources and Water Supply and Sanitation. Vehicle spares constitute the next significant spending area, with 103 tenders.

The Punjab government allocates substantial funds annually, amounting to tens of thousands of crores, for the procurement of diverse goods, works, and services. This procurement is carried out through an open tendering process, where eligible vendors or suppliers can secure the tender by submitting competitive prices and strong technical proposals.

By Syler