The union cabinet is likely to examine on Friday the draft bill seeking to make the process of awarding civil works, service contracts and goods purchased by all government departments above the value of Rs 50 lakh transparent through a clearly-defined procedure.
It also provides for a jail term ranging between six months and five years for those public servants found guilty of demanding and accepting bribes from those who bid for government contracts and supplies.
Annual government spending on procurements is between Rs 2.5 lakh crore to Rs 3 lakh crore or about one-fourth of the union budget.
The cabinet will take up the draft Public Procurement Bill, cleared last month by the group of ministers (GoM) to tackle corruption, headed by finance minister Pranab Mukherjee. It will apply to all central ministries, departments, public sector units and companies in which the government’s share is over 50%.
The government, however, has decided to keep emergency purchases made during the natural calamities like earthquakes and floods out of purview of this bill. The procurements for defence and strategic purposes have also been exempted.
The issue of making public procurements transparent and accountable was first raised by the Congress president Sonia Gandhi in December 2010. A month later it was included in the terms of reference of the GoM to tackle corruption.
PM Manmohan Singh in his independence day speech last year, had announced the decision to bring a bill to streamline government procurements.
According to the draft bill, there should not be any restriction on number of bidders, other than on specified conditions and details of contracts awarded should be made public.