International Construction Law Review
PUBLIC PROCUREMENT IN INDIA: CHALLENGE AND REFORM
SOUGAT SINHA
MCI Arb, Advocate
*
I. INTRODUCTION
Public procurement denotes purchase of goods and services using public funds by government entities such as ministries, departments, municipal corporations and other local bodies, statutory corporations and public sector undertakings.1 Public procurement has grown exponentially in India since independence.2
The procurement function of the government is a means to improve the lives of the people of the country.3 It involves expenditure of enormous amounts of public money and significantly affects domestic economics.4 A considerable portion of government budget is spent on awarding procurement contracts which in most countries adds up to 10–15% of the gross national product.5 In India, government expenditure on public procurement amounts (approximately) to 15–20% of the GDP and in absolute terms a mind-boggling 12–15 trillion (â165–205 billion) per annum.6 Public procurement is one of the most vital functions of the government7 and it consumes a large share of taxpayers’ money. Hence it is a legitimate expectation of the public that the moneys be spent for value received and the procurement system is implemented to maintain commerciality, impartiality and competitiveness.
* Sougat Sinha is a corporate and commercial lawyer and registered with the Bar Council of Delhi. He is also a Fellow of the Institute of Company Secretaries of India and an associate member of the Institute of Chartered Secretaries and Administrators. This paper is an abridged version of his dissertation paper, which was awarded a distinction, submitted for his LLM in Corporate & Commercial Laws from Queen Mary, University of London.
1 Manickam Supperamaniam, “Asian Perspective of Government Procurement Matters” [2006] 1 Asian J WTO & Int’l Health L & Pol’y 291, 291.
2 World Bank, India Country Procurement Assessment Report (ICPAR) (Report No 27859-IN, 2003), 6.
3 John Linarelli, “The WTO Agreement on Government Procurement and the UNCITRAL Model Procurement Law: A View from Outside the Region” [2006] 1Asian J WTO & Int’l Health L & Pol’y 317, 319.
4 Megan A Kinsey, “Transparency in Government Procurement: An International Consensus?” (2004–2005) 34 Pub Cont LJ 155, 156.
5 Supperamaniam , op. cit. n. 1.
6 Montek Singh Ahluwalia, Deputy Chairman Planning Commission of India, Draft Procurement Bill, 2011, 20 September 2011, Preface, 1.
7 Draft Discussion Paper on Public Procurement, “Public Procurement: Problems and Prospects” http://nadfm.nic.in/learning/Research%20Cell/Public%20Procurement%20-%20problems%20and %20prospects.pdf, accessed 29 July 2012.
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