It also announced suspension of a senior official for alleged malpractice in purchase of medicines for civic hospitals.
The probe will be headed by Additional Chief Secretary (General Administration Department) Bhagwan Sahay, Public Health Minister Deepak Sawant told the Legislative Council.
If the preliminary inquiry, to be completed in a month, reveals any irregularities, the government will ask the Anti-Corruption Bureau (ACB) to probe the matter further under supervision of a retired Bombay High Court Judge, he said.
Refuting certain allegations levelled by Leader of Opposition Dhananjay Munde of NCP in context of the scheme, Sawant informed the House the policy of buying medicines through Central Procurement Committee was framed in September 2011 by the then Congress Health Minister Suresh Shetty.
"It was then decided the minister should not be involved in the purchases of medicines and medical equipment," he said.
Replying to allegations of government procuring school materials at higher price, Minister for Tribal Development Vishnu Savara said in 2015-16 his department faced problems in buying items like uniforms, shoes, foodgrains and toiletries for adivasi residential schools.
He said the government will order a probe headed by a Secretary into the purchases.
Munde asked the BJP-Shiv Sena government to set up a corporation to ensure purchase of items required by all its departments are made through a single body so as to avoid any corruption.
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