Madhya Pradesh, with a population of 87.7 million, covers an area of 308,252 square kilometers (119,017 square miles), representing 9.38% of India's total geographical area and ranking as the 2nd largest Indian state by area out of 28 states. Madhya Pradesh holds the 5th position in terms of population among Indian states. The Gross Domestic Product (GDP) for Madhya Pradesh in the fiscal year 2023-24 is Rs.13.87 lakh crore, marking a 10.12% increase over the previous year's GDP in 2022-23. While India's GDP growth hovers around 6 percent, Madhya Pradesh emerges as a rapidly growing state with a growth rate of 5 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 Madhya Pradesh.

Procurement in Madhya Pradesh relies primarily on funding allocated in the government budget, supplemented by contributions from Public Sector Undertaking (PSU) entities. For the fiscal year 2023-24, the government budget for Madhya Pradesh is set at Rs.2,81,552 crore, marking a substantial 12% increase from the previous year's total budget expenditure of Rs.2,25,843 crore in the fiscal year 2022-23. The state's procurement activities benefit from the financial support provided by 30 PSUs, which generate revenue through service provision. These funds are utilized for various purposes, including the procurement of goods, project implementation, and acquiring services. Noteworthy PSUs involved in these activities include M.P. Agro Industries Development Corporation, M.P. Energy Development Corporation, and M.P. State Industrial Development Corporation.

Within the comprehensive budget of Rs.2,81,552 crore, a designated sum of Rs.1,07,313 crore is earmarked for committed expenditure, constituting 38.05% of the total budgetary allocation. The committed expenditure of the Madhya Pradesh Government on the revenue account predominantly covers interest payments, salaries, pensions, and subsidies. The remaining 61.95% of the budget is predominantly allocated for procurement purposes. Additionally, Public Sector Undertakings (PSUs) contribute to the overall procurement expenses. Assuming that procurement accounts for 10% of the GDP, the estimated procurement expenditure by the Madhya Pradesh government stands at approximately Rs.1.387 lakh crore.

In the fiscal year 2023-24, the Madhya Pradesh government has allocated Rs.54,056 crore for capital outlay from its total budget of Rs.2,81,552 crore. This capital outlay covers expenses related to equipment, machinery, land, plant, buildings, warehouses, furnishings, fittings, business vehicles, and software. Additionally, it encompasses civil works procurement for new infrastructure like roads, bridges, drainage systems, as well as large-scale projects such as dams, stadiums, airports, and harbors. Given the substantial financial requirements of various government projects, loans may be obtained from entities like the World Bank and the Asian Development Bank. Notably, the current capital outlay represents a 19% increase compared to the previous fiscal year.

The Madhya Pradesh state government oversees 50 departments engaged in the procurement of various goods, works, and services. Rural development efforts in the state are overseen by entities such as the Department of Local Government and the Department of Rural Development and Panchayats. Procurement at the local government level is managed by municipalities and district administrations. As of 2023, Madhya Pradesh is home to 16 municipal corporations, with Indore ranking as the largest in both area and population. The state is divided into 52 districts, with Chhindwara holding the distinction of being the largest district in terms of area.

The Madhya Pradesh government allocates 16.1% of its total budget expenditure to the education sector. This allocation encompasses various items, such as providing educational kits, distributing school uniforms, and supplying hostel items. Additionally, funds are designated for civil works, including the construction and maintenance of school buildings. These expenditures are managed by agencies like the Department of Medical Education and Research and the Department of Higher Education.

Madhya Pradesh allocates 9% of its overall budget expenditure to the energy sector, supporting diverse initiatives. These funds are utilized for acquiring solar products, providing energy-saving equipment, and procuring power conditioning devices. The allocation extends to civil works, encompassing the construction and maintenance of power lines, solar power plants, and energy conservation projects. Furthermore, services such as the installation of solar streetlights are included in the expenditure. Oversight of these initiatives falls under the purview of agencies like the Madhya Pradesh Energy Department and MP Urja Vikas Nigam Limited.

The Madhya Pradesh government allocates 6.4% of its overall budget expenditure to the agricultural sector. These funds serve a diverse range of purposes, including the purchase of seeds, provision of fertilizers, procurement of manures, and the acquisition of drip irrigation equipment. Additionally, provisions are in place for civil works, involving the construction and repair of agricultural buildings, greenhouses, and poly houses. The oversight and execution of these expenditures are managed by agencies such as the Department of Agriculture and the Directorate of Agriculture and Farmers Welfare.

To ensure transparency, the government is required to adopt an open tendering process for procurement, widely publishing these tenders across numerous web portals. As of December 14th, Tendersniper portal indicates over 5155 live tenders in Madhya Pradesh. Analyzing these tenders offers insights into the government's spending priorities. The highest expenditure area in Madhya Pradesh is Vehicle Hiring, with 117 tenders, primarily published by the Madhya Pradesh Tourism Board, MPPGCL and Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Limited. The second-highest spending category is Park Development, with 115 tenders, mostly published by the MPSTDC and Madhya Pradesh Urban Administration and Development Department. Road Construction takes the third spot with 86 tenders, largely advertised by the Bhopal Development Authority, Madhya Pradesh PWD and Madhya Pradesh PWRD.

The Madhya Pradesh 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.