Competitive bidding must be followed in defence procurement: Rajnath Singh

The rule of competitive bidding through open tender must be followed in the domain of defence procurement, said Defence Minister Rajnath Singh on Wednesday.

Singh was speaking at the inauguration of the International Conference on Defence Finance and Economics in New Delhi.

"A competitive bid-based procurement process, which is open to all, is the best possible way to realize the full value of the public money being spent. Of course, there would be some rare cases when it may not be possible to go for an open tender process. However, such instances should come under exceptions and exceptions should not become the rule," he said.

He added that the funds which are deployed for the defence requirements could otherwise be deployed for development, welfare, poverty alleviation, creation of social infrastructure etc. All these are worthy alternative uses, which are constrained to pay for the defence ecosystem. With such sacrifices being made, it is imperative that the money allocated to the defence needs in the most judicious manner possible.

"I have been told that there are studies that a robust system of defence finance greatly reduces corruption and waste in the defence expenditure," he said.

He added that even after following all the principles of financial prudence and propriety, there would be instances of wastage, pilferage, and even corruption. That is why, a robust system of internal and external audits needs to be put in place. The role of auditors is that of a watchdog or a sentinel. In India, the external audit is done by the Comptroller and Auditor General of India. An independent internal audit mechanism is also a part of the defence finance system in India.

"There should be a sound system of accounting, passing of bills and payment, salary and pension disbursal, etc, as it frees our defence personnel to concentrate on their core jobs. When the functions of defence finance are separated from the core defence organizations, it has multiple advantages. The chances of leakages, corruption, and wastage are reduced," he said.

A positive public opinion is generated when there is justified confidence that public money is being spent optimally and prudently. With greater public trust and confidence in the system of defence expenditure, the defence system benefits overall, he added.