Assam’s green budgeting boosts green public procurement trends

Assam is one of the most vulnerable states to climate change in the Indian Himalayan Region. The state’s climate change action plan (ASAPCC 2.0) includes ambitious plans to institutionalize climate and environmental goals – often called “green goals” – in its public finance management systems and tools. 

CivicDataLab in partnership with the Open Contracting Partnership is providing support to the Government of Assam to help them achieve these goals. Over the last three years, Assam has successfully incorporated open contracting practices into its green public finance management (GPFM) systems, policies and processes, including green public procurement (GPP) and green budgeting, with the latter first introduced in the financial year 2023-24. In 2022, Assam became the first Indian state to share data on its public contracts and spending in the public domain, mapped to Open Contracting Data Standards (OCDS), providing a unique opportunity to analyze its spending against its climate action plan.

Its US$3 billion Green Budget for 2024-25 integrates climate and environmental considerations into public financial planning by setting aside funds for specific green goals so that good intentions can be turned into reality. The Green Budget, which was conceptualized and rolled out in the state with input from CDL, also introduces a tagging methodology to: 

• Classify spending activities by domain and sub-domains. This includes climate mitigation (e.g. solar power plants, electric vehicles), adaptation (e.g. disaster risk reduction, agricultural innovation), and environmental sustainability (e.g. development of nature corridors and preservation of wildlife habitat).
• Describe the estimated potential impact of this spending – ranging from highly favorable, moderately favorable, neutral, to less favorable. These categories, based on the OECD’s Rio markers system, are used to track development finance and spending on Rio Convention themes. They’re slightly modified for state requirements, but retain the scoring system: 100% for highly favorable, 40% for moderately favorable, and 0% for neutral and less favorable.

This allows the state to track and measure its performance against its green goals and more easily identify where they are performing well and where they need to step up action. 

Working closely with Assam’s Finance Department, we analyzed Assam’s procurement data published online on the state’s procurement portal on a real-time basis and on data.gov.in to assess how public contracts are being spent and to what extent they are meeting Assam’s green goals. We selected 14 departments corresponding to the nine sectors identified as vulnerable to climate change in the state’s climate change action plan. These departments have also reported to the Green Budget for the 2023-24 and 2024-25 financial years. The departments and vulnerable sectors are listed below. 

Data suggests Assam is spending more money on green procurement

We used the green tagging methodology detailed in the 2023-24 Green Budget and applied it to the public procurement data. To do this, we had to review all public contracts to identify which procurements were ‘green’, determine which commitments they correspond to in the Green Budget, correctly tag them according to the Green Budget methodology and then analyze them. We learned that:

• The percentage of total green procurement awarded almost tripled after the introduction of the Green Budget and shows a quadruple increase in the second iteration (as compared to non-green budget base year).
• While the value of green contracts awarded more than doubled in the first year, the total share of green procurement (in absolute numbers) has seen a relatively tepid progression (likely because this analysis only covers the first 6 months of the FY 2024-25 fiscal year).
• Since the introduction of the Green Budget, we see an increase in funds allocated to water reuse and solar-based projects. We also see more procurement around soil anti-erosion measures as a proactive flood mitigation technique across districts in Assam (carried out by the Water Resources Department). There is a clear upward trend for both climate adaptation and mitigation initiatives across departments. 
• In Year 2 of the Green Budget, the share of green procurement increased significantly in the following line departments: Power, Water Resources, Public Works (Roads), and Public Works (Building and National HIghways). These departments are especially important for reducing climate vulnerability. 
• Procurement for urban waste management, bio-agro resources, renewable energy-based irrigation measures (Medium Deep Tubewell Scheme or MDTS) are some of the recent new green initiatives introduced. These innovative/pilot projects were made possible through the new earmarked funding in the green budget.

The way forward

The introduction of the green budget in Assam has catalyzed green public procurement initiatives, especially solar energy and irrigation projects. We shared the findings with various departments of Assam’s government and related stakeholders. All are committed to continuing this work to drive green goals in Assam. We have already identified concrete actions that will help further improve green public procurement:

1. Scope

In our analysis for FY 2024-25, we have considered only tenders awarded till October 2024. Many tenders and contract awards will occur from October-March towards the end of the financial year. We expect the growing trend of green public procurement to continue in the remaining months of this ongoing financial year.

Only 14 departments have been considered in our analysis so far. To get the full picture of the state’s overall performance, we will expand the study to cover all line departments.

For this analysis, the tagging was done based on tender titles. In the coming weeks, we will re-run our data analysis to include tender descriptions to add further rigor to our analysis where tender titles do not fully reflect tender objectives.

2. Process

Data capture: In the coming months, we will work with procurement officers in Assam to improve the nomenclature of tender titles and tender descriptions to ensure all climate and environmental actions undertaken by departments are accurately reflected in the procurement data. We will also further classify procurements into three broad domains and 22 sub-domains per the ASAPCC 2.0. This will make automating analysis and measuring progress against green goals easier.

Guidance: In our capacity building sessions, Assam procurement officers highlighted their challenges in identifying and classifying procurement as green because they don’t have a systematic or standardized approach or guidance for tagging green procurement yet. So, we will work with these departments to develop a Standard Operating Procedure to introduce such a system and to further strengthen the government’s capacity to implement a more effective nomenclature. 

3. Capacity building

Assam’s government requested additional support to build their capacities to improve green public procurement in the state further. We are working to develop the capacity in terms of processes and highlighting innovative solutions coming up in the market and how they can be prioritized. 

These simple steps will help to transform the public procurement landscape in Assam further, helping the state government to meet its green goals and demonstrating the potential for public procurement to be an effective mechanism for safeguarding our planet.

This article was written by CivicDataLab’s Bhanita Boro, Gaurav Godhwani, Kabeer Arora, Mayank Manish, and Shuchita Rawal and OCP’s Bernadine Fernz.