Maharashtra, with a population of 131.6 million, covers an area of 307,713 square kilometers (118,809 square miles), representing 9.36% of India’s total geographical area and ranking as the 3rd-largest Indian state by area out of 28 states. Maharashtra holds the 2nd position in terms of population among Indian states. The Gross Domestic Product (GDP) for Maharashtra in the fiscal year 2023-24 is Rs.38,79,792 crores, marking a 10% increase over the previous year’s GDP in 2022-23. While India’s GDP growth hovers around 6 percent, Maharashtra emerges as a rapidly growing state with a growth rate of 10.2 percent. A considerable portion of the government’s spending is dedicated to procurement, and here is an examination of the procurement expenses in the state of Maharashtra.
The primary source of funding for procurement is the budget, and additional funding for procurement is sourced from Public Sector Undertaking (PSU) entities. For the fiscal year 2023-24, Maharashtra’s government budget is Rs. 5,47,450 crores, representing a significant 3.6% increase from the previous year’s total budget expenditure of Rs. 4,51,949 crores in the fiscal year 2022-23. In Maharashtra, 20 PSUs generate revenue through service provision, utilizing these funds for the procurement of goods, project implementation, and service acquisition. Some notable PSUs include General Insurance Corporation Of India Limited (GIC) Mumbai, Hindustan Petroleum Corporation Limited Mumbai, and Bharat Petroleum Corporation Limited Mumbai.
Within the total budget of Rs. 5,47,450 crores, a dedicated allocation of Rs. 2,50,156 crores is assigned to committed expenditure, making up 45.78% of the overall budget. The committed expenditure of the Maharashtra Government on the revenue account primarily includes interest payments, salaries, pensions, and subsidies. A significant portion of the remaining 54.22% is reserved for procurement. Additionally, PSUs contribute to procurement expenses. Assuming that procurement constitutes 10% of the GDP, the estimated procurement expenditure by the Maharashtra government is approximately Rs. 3,87,979.2 crores.
In the fiscal year 2023-24, out of the total Maharashtra government budget of Rs. 5,47,450 crores, the capital outlay is Rs. 73,901 crores. Government capital outlay encompasses expenditures on equipment, machinery, land, plant, buildings, warehouses, furnishings and fittings, business vehicles, and software. It also includes civil works procurement for new roads, bridges, drainage systems, as well as large-scale infrastructure projects like dams, stadiums, airports, and harbors. Many government projects require significant investment, and the government may obtain loans from agencies such as the World Bank and the Asian Development Bank. The current capital outlay reflects a 2% increase from the previous year.
The Maharashtra state government operates 36 departments involved in procuring a range of goods, works, and services. Rural development initiatives in Maharashtra are managed by entities like the Maharashtra Department of Industries, Energy, Labor and Mines andMaharashtra Food, Civil Supplies and Consumer Protection Department. Municipalities and district administrations handle procurement at the local government level. As of 2024, Maharashtra has 29 municipal corporations, with Municipal Corporation Greater Mumbai (MCGM) being the largest in terms of both area and population. The state comprises 36 districts, with Ahmednagar holding the distinction of being the largest district in Maharashtra by area.
The Maharashtra government has allocated 16.6% of its overall budget expenditure to the education sector. This funding is specifically designated for various purposes, including providing educational kits, distributing school uniforms, and supplying hostel items. Additionally, funds are earmarked for civil works, encompassing the construction and repair of school buildings. Oversight and management of these expenditures fall under the purview of agencies like the Department of Medical Education and Research and the Department of Higher Education.
In Maharashtra’s agricultural sector, the government allocates 5.9% of its overall budget expenditure. These funds are utilized for various objectives, encompassing the acquisition of seeds, distribution of fertilizers, procurement of manures, and obtaining drip irrigation equipment. Moreover, there are allocations for infrastructure projects, involving the construction and maintenance of agricultural buildings, greenhouses, and playhouses. The implementation of these financial allocations is supervised by agencies such as the Department of Agriculture and the Directorate of Agriculture and Farmers Welfare.
Directing 5.8% of its total budget expenditure to Roads and Bridges, the Maharashtra government utilizes these funds for diverse purposes. This includes the acquisition of construction materials, provision of structural materials, procurement of sand, and obtaining construction equipment. Additionally, there are provisions for civil works, entailing the construction and repair of roads, bridges, flyovers, and gravel roads. Oversight of these expenditures falls under the purview of agencies such as the Department of Local Bodies and the Department of Rural Development.
Within the health sector, Maharashtra allocates 4.6% of its total budget expenditure. These funds serve diverse purposes, encompassing the acquisition of medical equipment, provision of veterinary equipment, and procurement of drugs. The allocation also extends to civil works, including the construction and maintenance of medical hospitals, dispensary buildings, and veterinary hospital structures. Additionally, services such as hospital sanitation fall under the umbrella of this expenditure. The oversight and management of these initiatives are entrusted to agencies like the Health and Sanitation Department and the Department of Health and Family Welfare.
In order to uphold transparency, the government is mandated to embrace an open tendering process for Mahatenders procurement, ensuring widespread publication across numerous web portals. As of January 3rd, 2024, Tendersniper portal indicates over 13332 live Maharashtra Tenders. Analyzing these tenders offers insights into the government’s spending priorities. The highest expenditure area in Maharashtra is Road Construction, with 349 tenders, primarily published by the Maharashtra Public Works Region and Maharashtra Housing And Area Development Authority. The second-highest spending category is Road Relaying, with 336 tenders, mostly published by the Department of Rural Development and Maharashtra Public Works Region. CC Road takes the third spot with 296 tenders, largely advertised by the Malegaon Municipal Corporation and Nashik CEO Road. Community Hall Construction constitute the next significant spending area, with 184 tenders mostly published by Maharashtra Housing And Area Development Authority and Public Works Region Maharashtra.
The Maharashtra government allocates substantial funds annually, amounting to tens of thousands of crores, for the procurement of diverse goods, works, and services. This procurement is carried out through an open tendering process, where eligible vendors or suppliers can secure the tender by submitting competitive prices and strong technical proposals.