The Competition Commission is working on a “digital screen-based” system to detect possible cartelisation in public procurement tenders, a senior official said Monday.
The fair trade regulator has been working on ways to curb anti-competitive practices across sectors in the marketplace, and public procurement is a key area as it accounts for around 20 per cent of the country’s gross domestic product (GDP).
Competition Commission of India (CCI) Chairperson Sudhir Mital said the regulator was working on a “digital screen-based cartel detection system”.
Speaking at a conference on public procurement and competition law here, he said the tool would have capabilities to scrutinise tenders based on several parameters and check for any anti-competitive aspect, he added.
Generally, cartel refers to entities coming together in an effort to manipulate prices.
According to him, procurement mechanism adopted by most departments are not designed keeping in mind the importance of competition in ensuring “optimum price discovery” through competitive bidding.
Clamping down on anti-competitive practices in public procurement, the watchdog has passed orders against entities indulging in such practices in certain cases.
Observing that effective competition and public procurement are two sides of the same coin, Mital said, adding that “free, fair and effective” procurement system would help in reducing costs.
Speaking at the conference, Corporate Affairs Secretary Injeti Srinivas said that, globally, public procurement accounts for 50 per cent of the GDP and it is around 20 per cent in India.
He added that 20 per cent of the country’s $2.6 trillion economy would amount to around Rs 28 lakh crore.