Now, a Bill to Make Deals Over R50 Lakh Transparent 

In a major anti-graft move, the Union cabinet on Thursday cleared a key bill that would make the process of awarding civil work, service contracts and goods purchases above R50 lakh open and transparent through a clearly defined procedure.

The government, however, has decided to keep emergency purchases made during natural calamities such as earthquakes and floods out of the purview of the Public Procurement Bill2012. Procurements for defence and strategic purposes have also been exempted.

The annual government spending on procurements is anywhere between R2.5 lakh crore and R3 lakh crore — about one-fourth of the union budget. “The bill is exceptionally important because it is part of our commitment to deal with the issue of corruption… It will result in improving efficiency and quality,” telecom and HRD minister Kapil Sibal said.

The bill will also cover all public sector units and companies, in which the government's share is more than 50%. It provides for a jail term ranging between six months and five years for public servants found guilty of demanding and accepting bribes from those who have bid for contracts and supplies.

The bill also states that there should be no restriction on the number of bidders, other than on specified conditions, and all the details of contracts awarded must be made public. The government will also introduce an open electronic auction system that will eliminate the ‘lowest-bidder-wins’ principle, which governs most procurements.

The bill is based on the recommendations of a special committee, headed by former Competition Commission of India chairman Vinod Dhall, which had asked for changes in the procurement process. It was finalised in February by the group of ministers (GOM) to tackle corruption.

Hindustan Times, New Delhi, 13-04-2012