THE GIST of Editorial for UPSC Exams : 24 March 2020 (Procurement reform : Jugaad legislation in India (Indian Express))



Procurement reform : Jugaad legislation in India (Indian Express)



Mains Paper 2:Polity 
Prelims level:  Public Procurement (PP) Bill
Mains level:Jugaad legislation and its effect on Indian political system. 

Context:

  • While researching over 10,000 Bills that had been introduced in legislatures nationwide in the US over eight years, a recent investigation by the USA Today, The Arizona Republic and the Center for Public Integrity found that they had been almost entirely copied from versions written by special interest groups.

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Background: 

  • Indeed, copycat Bills originating from self-styled ‘model’ ‘international’ legislation can pose serious dangers, as was quickly discovered by the government of India while reviewing the (draft) Prevention of Bribery of Foreign Public Officials and Officials of Public International Organisations Bill, 2011. 
  • The 2011 Bill lapsed, perhaps once it was realised by the government that the Bill would severely disadvantage Indian entities vis-à-vis foreign companies.
  • Since the latter could easily reinforce their business interests by exploiting a number of loopholes with foreign legislations such as the US’s Foreign Corrupt Practices Act and the UK’s Anti Bribery Act.

Draft Public Procurement (PP) Bill:

  • The Indian government was equally nifty when dealing with mounting international pressure for the ‘quick’ passage of the (draft) Public Procurement (PP) Bill, which was also later allowed to lapse. 
  • Multiple versions of the draft PP Bills in 2011-12 had been drafted by the (then) Planning Commission of India, virtually copy-pasting the UNCITRAL Model Public Procurement Law of 1996, not even the already released 2011 version. 
  • The first draft required foreign bidders to be treated at par with domestic bidders, staring in the face of many legal and non-tariff barriers to participation by Indian bidders in external public procurement markets such as those in the US, Europe and China.
  • It is easier for the government of India to overcome external agency pressure, given its size and high standing in international politics, but state governments in the country have not been as lucky, especially when faced with strong market-opening measures pursued by international loaning agencies as ‘public finance management’ reforms.

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Procurement reform experiences:

  • Almost 10 years ago, Rajasthan was the first state to enact UNCITRAL-styled public procurement legislation in India—the Rajasthan Transparency in Public Procurement (RTPP) Act 2012—resulting in perhaps the fattest but a rather unnecessary ‘reform’ measure of this variety. 
  • Copy-pasting in Rajasthan went on to the extent of permitting ‘competitive negotiations’ under state law, when there is virtually no one in the state who understands either its meaning or its complexity, and therefore, unsurprisingly, not one single contract has been processed in Rajasthan during the last eight years under this method after enactment of the RTPP Act. 
  • Assam followed next in Rajasthan’s footsteps in 2017, copy-pasting all the confusion and inefficiencies with the Rajasthan Act in the Assam version as well; although they managed to remove some of these defects while finalising their draft rules. 
  • Punjab, as recently as in September 2019, seems to have fallen prey to using the legislative route to procurement reform, as if efficient project execution can be achieved without proper allocation of risk, and without first ensuring simplified procurement procedures and standardised bidding documents.

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Provisions on debarment:

  • The Punjab Act makes for comparatively more interesting reading, given its rather unique provisions on debarment (sections 7 and 56) and blacklisting (section 26), without defining either of these phrases, and even though these two concepts, as a matter of legal practice, are virtually the same!
  • Punjab’s debarment provisions have been copy-pasted from the Rajasthan/Assam texts, while its blacklisting provisions seem to have been copied from some of its earlier executive instructions. 
  • All this confusion seems to have happened in Punjab only because of copycat legislation without attempting to appreciate procurement complexities in a bottoms-up manner, particularly when contractor ineligibility as a matter of international best practice, and even under the government of India’s 1971 framework for banning and suspension of business dealings, has always been narrowly interpreted and applied to contracts awarded only by the debarring agency/department.

Conclusion:

  • It would, of course, be premature and naïve to state that the only defects with the Punjab, Assam, Rajasthan texts are in relation to their provisions on debarment, blacklisting, competitive negotiations. 
  • There appear to be many other instances of similar confusion and impracticality in each of these states—confusion that is unlikely to die down soon enough.

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General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q.1)With reference to the permanent commission for women in the Navy, consider the following statements:

1. Supreme Court lifted the statutory bar on the induction of women officers in the Navy.
2. Supreme Court granted pension benefits to women officers who have retired and were not granted permanent commission.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer............................................

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Mains Questions:
Q.1)Copycat Bills originating from self-styled ‘model’ ‘international’ legislation can pose serious dangers to the government. Comment. 


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