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10/02/2017 01:50pm

UP Elections: MSME entrepreneurs highlight ground reality of doing business in UP

image UP Elections: MSMEs entrepreneurs highlight ground reality of doing business in UP

Lucknow, Feb 10 (KNN) Industrialization, which is a base for development of a particular region, is considered to be the main agenda for winning or losing an election. But things are not same in Uttar Pradesh.

The state which is set to go on polls tomorrow, seldom witnesses talks about industries from any political parties.

KNN spoke to many industrialists in the state, who on condition of anonymity, spoke about ground reality in the state as far as business is concerned.

A senior entrepreneur from Meerut said, “The government here has no vision about industry. They have no plans, no actions decided and no intension to do so. They are not realizing that it is industry which will ultimately lead to development of a state.”

He said, “The corruption is so badly inducted in the system that it compels the entrepreneurs to settle a matter at the lowest level. As higher you go, higher the corruption level is.”

He further added that there is no focus on industry in any of the parties’ manifesto.

Sharing similar view, a Lucknow based entrepreneur revealed ill practices in the tender processes.

He explained the matter in details. The MSME entrepreneur said, “In Government procurement in general there are two types of procurement arrangements (Tendering Process) The Lease Cost Selection and Quality cum Cost-Based Selection (QCBS).

In Lease Cost Selection he said, “In this all prospective bidders are required to follow a Pass/ Fail criterion based on the present requirement of client and  among the pass candidates the entity with lowest quoted rates is the winner.

This system ensures that the contract is awarded to the bidder who provides a product which meets all the mandatory requirements set forth in the RFP at the least cost. This system safeguards the best utilisation of Government Exchequer.”

While in Quality cum Cost-Based Selection (QCBS), he said, “this system simply entails evaluation based both on the cost committed by the bidder and the technical qualifications of the bidder. The evaluation of the proposals in this case is also carried out in two stages: first the quality, and then the cost.”

“In India we have started opting QCBS even in very small assignments because it gives path for manipulation among different bidders at cost of extra burden on tax payer’s money,” he pointed.

Cardinal principle of public procurement is to procure the material / services / works of the specified quality at the most competitive prices and in a fair, just and transparent manner. To achieve this end it is essential to have uniform and well documented policy guidelines in State so that this vital activity is executed uniformly throughout state in all departments and corporations in a well-coordinated manner to have effective control on time and cost overruns.

“In our State in some organizations Procurement Manual is either not in place or has not been updated for years together which renders the system of procurement ad-hoc and arbitrary. A codified Procurement Manual containing the detailed procurement procedures and guidelines needs to be prepared by the organizations so that there is systematic and uniform approach in the decision-making. An integrated procurement policy in the form of Procurement Manual will help in circumventing the possibility of corruption and would also ensure smoother and faster decision making, he said.

The success of a project largely depends on the capability of the contractor/vendor. Prequalification is a process to select competent contractors having technical and financial capability commensurate with the requirements of the particular procurement (work/supply of goods/hiring of services). The pre-requisites of pre-qualification process are Transparency, Fairness and Maintenance of fair competition.

Though CVC has issued guidelines for Pre-qualification Criterion vide circular no. 12-02-1-CTE-6 dated: 12.12.2002 and 07.05.2004 advising the organizations to frame the pre-qualification criteria in such a way that it is neither too stringent nor too lax to achieve the purpose of fair competition then too in most of the Central Government Organizations they have mended smart ways to dig holes in these provisions for example if a project  of say Rs. 100 Crores is to be executed the first question to be raised is in how much time because the clause of financial capability is dependent on this time factor. If the work is to be executed in 2 years the turnover requirement of the Contractor will be Rs. 15 Crore and if the same work is to be executed in 3 years it will mellow down to Rs. 10 crores. “This gimmick is being used to favour contractors of one’s own choice,” he said.

“The other way this is being manipulated is that in order to favour contractor of their choice at times one project is being clubbed to other project making it very stringent for small and medium contractors or even splitted in number of packages to help smaller contractors.  A proper control on these decisive activities which underlines probability of corruption needs a proper check and control and in audits of the unit person involved in these activities need to be identified and brought to book. This is very easy as splitting is the most visible item when compared to sanction of the project and that of the entered agreement. Regarding time control if the work gets completed in the prescribed time span it is OK otherwise if there is remarkable saving in time or remarkable overrun of time the person concerned who estimated the time of completion should be taken to task,” he said. 

It is said that tenders are now being floated / received and decided through e-portal making all process fully transparent and visible while in reality it is nothing but only physedo propaganda only, he said.

Even after submission of the bid in e portal still some papers are to be submitted physically and there is a great chance of manipulation in this, he added.

KNN has spoken to many other industrialists in big and small districts of the state. They said the focus of the government was never on industries and even if they promised certain things, implementation at ground level was a big challenge.


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