India needs to invest in its infrastructural sector to build efficient logistics and warehousing facilities. It includes building rural infrastructure, cold storages, warehousing facilities.
 When goods or services are purchased by a public sector, it is called public procurement. As has been rightly said, ‘it is the process by which Governments and public sector institutions buy inputs for vital public sector investments in physical infrastructure and for strengthening institutional human capacities which lay the foundation for national development. Vijay Kalantri analyses the India’s position in terms of strategic procurement and also discusses the major issues faced by procurement sector. 
India in terms of strategic procurement“Procurement is the acquisition of appropriate goods and/or services at the best possible ‘total cost of ownership’ to meet the needs of purchaser in terms of quality, quantity, time and location,” defines Mr Kalantri.
With 10 to 15 per cent of the national budgets in developed countries, and up to 20 per cent in developing countries, government procurement accounts for a substantial part of the economy. India is no exception where public procurement in India constitutes about 15 per cent of the budget. Departments like defence, railways and telecom devote about 50 per cent of their budget to procurement, which happens to be higher than the expenditure of most of the state governments. It is estimated that the annual expenditure on public procurement for the Union Government is in the range of ` 2.5 – 3 lakh crore.
Present challengesMr Kalantri explains the challenges in detail being faced by present procurement community as follows:• Existence of multiple procurement guidelines and procedures: A major problem expressed by the procurement officials is the confusion created by the existence of multiple procurement guidelines and procedures established by multiple agencies. There is neither a single comprehensive public procurement standard nor a single nodal agency to deal with public procurement policy• Poor quality of manpower: The quality of manpower which operates the procurement system is equally crucial. In India, public procurement has never been treated as a specialised activity requiring specialised knowledge and skills. Even the most critical and complex procurements are handled in a non-professional manner. Except for the Railways and the DGS&D, no other organisation has created a specialised cadre for this purpose. In most of the developed countries and international organisations, occupying a procurement desk requires some professional qualification. There is a need to either have qualified staff handling procurement or to provide adequate professional training to convert the procurement officials into procurement managers• Lack of avenues/interest in knowledge building: While procurement managers at top level do take interest in knowledge building and keep themselves updated about various facets of procurement including market trends, the same is not true for all the levels. In fact, many procurement managers are not even aware about the basic tenets of procurement manuals applicable to their domain area• Absence of an exclusive law governing public procurement: In the absence of an exclusive law governing public procurement, the conditions governing the contract contain provisions for settlement of disputes and differences binding on both parties. Thus, there may be problems related to uniformity of contractual conditions, or the interpretation/implementation of the same• Inadequate logistics and storage facility: This hinders the progress of procurement in India. Inadequate availability of proper storage and supply chain logistics in India has been broad based wastage of supplies (especially of perishable goods like vegetables and fruits). India needs to build its infrastructural status in this regard.
Logistics supply: primary component “India needs to invest in its infrastructural sector to build efficient logistics and warehousing facilities. It includes building rural infrastructure, cold storages, warehousing facilities,” suggests Mr Kalantri. India intends to invest around $ 1 trillion to build the necessary infrastructure and warehousing. Logistics supply is a primary component of the same.
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Central public procurement policy welcomeThe govt. is working towards a central public procurement policy to bring transparency, curb irregularities and corruption. The new procurement policy is intended to plug inconsistencies in government procurement arising due to multiplicity of guidelines. The new policy will also include procurement of services with a focus on engaging experts on contractual basis instead of permanent employment.
“The draft suggests a central procurement law to cover purchases by all government departments and organisations and lay down rules for different type of procurements,” informs Mr Kalantri. “The draft also envisages the creation of an independent national nodal authority for public procurement. It will be a law making and regulatory body, with an advisory role overseeing the procurement activities.”
 
– Vijay Kalantri, Managing Director, Balaji Infra Projects Ltd.