Delhi, with a population of 32.941309 million, covers an area of 1,483 square kilometers (573 square miles), representing 0.05 % of India’s total geographical area and ranking as the 4th-largest Indian Union Territory by area out of 8 Union Territories in India. Delhi is ranked 32nd in population among the states and union territories of India.
The gross domestic product (GDP) for Delhi in the fiscal year 2023-24 is Rs. 10.4 lakh crores, marking a 15.4% increase over the previous year’s GDP in 2022-23. While India’s GDP growth hovers around 6 percent, Delhi is emerging as a state with rapid growth, showcasing an impressive growth rate of 4.94 percent. A considerable portion of the Delhi government’s spending is allocated to procurement, and here is an examination of the procurement expenses in the state of Delhi.
The primary source of funding for procurement in Delhi is the budget, supplemented by additional contributions from Public Sector Undertakings (PSUs). For the fiscal year 2023-24, the Delhi government’s budget amounts to Rs. 78,800 crores, representing a significant 3.96% increase from the previous year’s total budget expenditure of Rs. 75,800 crores in 2022-23. Notably, 17 PSUs within Delhi generate revenue through various services, channeling these funds into the procurement of goods, project implementation, and service acquisition. Prominent among these PSUs are Delhi State Electricity Board, Delhi Development Authority, and Delhi Transport Corporation.
A designated sum of Rs. 3,097 crores is earmarked for committed expenditure in the comprehensive budget of Rs. 75,800 crores, representing 4.09% of the overall budget. Committed expenditure by the Delhi Government on the revenue account predominantly includes allocations for interest payments, salaries, pensions, and subsidies. A significant proportion of the remaining 95.91% is reserved for procurement. Furthermore, Public Sector Undertakings (PSUs) contribute to the expenses related to procurement. Assuming that procurement constitutes 10% of the GDP, the estimated procurement expenditure by the Delhi government is approximately 1.04 lakh crores.
Within the comprehensive Delhi government budget of Rs. 75,800 crores, an amount of Rs. 11,189 crores is specifically allocated for the fiscal year 2023-24 as the capital outlay. Noteworthy is the current capital outlay, demonstrating a 9% increase from the previous year. This capital outlay encompasses various expenses, including those related to equipment, machinery, land, plant, buildings, warehouses, furnishings and fittings, business vehicles, and software. Additionally, it addresses the procurement needs for civil works such as new roads, bridges, drainage systems, and extensive infrastructure projects like dams, stadiums, airports, and harbors. Recognizing the substantial investment requirements of many government projects, loans may be sought from entities such as the World Bank and the Asian Development Bank.
To ensure transparency, the government adopts an open tendering process for procurement, widely distributing these tenders across various web portals. As of December 23rd, 2023, the Tendersniper portal indicates a total of 4288 live tenders in Delhi. Analyzing these tenders offers valuable insights into the government’s spending priorities, with Road Construction tenders holding the top position among procurement categories, constituting 2.44% of the currently active tenders. Following closely are Ink Cartridges with 80 tenders, Aircraft Spares with 79 tenders, and Medicines with 67 tenders as the subsequent higher-ranked procurement categories.
Annually, the Delhi government earmarks substantial funds, amounting to tens of thousands of crores, for the acquisition of diverse goods, works, and services. The procurement method employed involves an open tendering process, enabling eligible vendors or suppliers to secure tenders by presenting competitive prices and robust technical proposals.
