India is emerging as the third largest economy in the world. Government procurement in the country represents a significant portion of its spending (estimated to be about 25 to 30 percent of GDP) and is a key determinant of budget execution outruns. Therefore, Public Procurement as an area of intervention is of great importance. Public Procurement by definition is the process of purchase of goods, works/construction and services by governments or public entities to fulfill the needs of the public authorities to carry out their responsibilities towards its citizenries. Since the Public Procurement Bill 2012, which was tabled in Parliament in May 2014, has lapsed with the dissolution of the 14th Parliament, the lack of an overarching law governing the Public Procurement in India has led to the subject being administered through a morass of rules set by different authorities, having no force of law.
At the moment, as far as the legal framework of Public Procurement in India is concerned, it has been governed by General Financial Rules (GFR), 2005, Delegation of Financial Power Rules (DFPR), 1978 and relevant guidelines of Chief Vigilance Commissioner (CVC) of India, High Court rulings and such diverse authorities have brought out directives on Public Procurement. So the matter is very chaotic and different organisations follow their own interpretation of various guidelines, leading to distortion of competition, lack of transparency and probity, which have in the past given rise to major incidents of diversion of public funds. Moreover, some of the recent procurement deals and controversies have brought in open the major failures in transparency, accountability, efficiency, competition and economy. It is, therefore, of utmost importance that the Procurement process overcomes the impediments of collusion, bid rigging, fraud and corruption.