Public Procurement Reform for Ease in Doing Business

Abstract

Public procurement is one area needing governmental reforms. It is largely governed by dated rules that businesses feel are not able to encompass the complex needs of a modernising Indian economy. They also feel that there is a plethora of public contract rules often not in harmony with each other creating confusion and giving opportunity for corruption. However, the Modi regime’s anti-corruption mandate should not stifle business initiative that is the main critique against the Public Procurement Bill (2012). An amended public procurement law should inter alia be comprehensive in its coverage. It should incorporate new forms of tendering to cover complex procurement situations, maintain balance between the cost and the quality in tender awards, check abuse of monopoly in single-source procurement, prevent ‘digital divide’ in transparency provisions, maintain balance between external openness and promotion of domestic economy in market access provisions, encourage sustainable public procurement, incorporate effective mechanisms for redressing grievances of bidders and avoid penal provisions punishing offences covered by existing laws. Regulatory reform in public procurement will have substantial economic impact, as government contracts annually average approximately 30 per cent of India’s GDP and cover almost every sphere of government activity. Hence, such a reform will improve India’s anti-corruption/ease of doing business global rankings.