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Ministerial panel okays public procurement bill

New Delhi, The group of ministers (GoM) on corruption on Wednesday approved the draft Public Procurement Bill, which seeks to regulate government purchases using a transparent bidding process. The bill is likely to be introduced in the forthcoming budget session of Parliament after getting clearance from the Union Cabinet.

"The GoM has approved the Public Procurement Bill. It will now go to the prime minister (for approval) and then to the Cabinet (for final clearance)," minister of state for personnel V Narayanasamy said after the meeting.

The GoM, chaired by finance minister Pranab Mukherjee, did not discuss the controversial proposal to give statutory backing to the model code of conduct which in effect would have taken away its enforcement from the Election Commission.

Narayanasamy said some controversy had erupted over the model code and despite his ministry's denial on the issue, "some confusion persisted". He said, "I would like to say that the terms of reference of the GoM on corruption does not include the MCC... since it is not in the ToR, it was not discussed. Therefore, the question of the issue of the model code of conduct being deliberated in the GoM does not arise."

When pointed out that the note circulated to GoM members clearly specified the issue of model code, the minister said the suggestions came at the time of discussions. He said, "Suggestions are there. But it is not part of the terms of reference."

It is learnt that the GoM also discussed the report of a committee set up to suggest ways of preventing corruption and increasing transparency while allocating natural resources. The panel has already accepted some of the recommendations of the committee headed by former finance secretary Ashok Chawla.

The draft bill on public procurement was recently put up in public domain by the finance ministry to elicit opinion. The proposed bill provides for facilitating a grievance redressal mechanism and penalties for offences, including barring of bidders found to engage in corrupt practices.

According to the draft bill, there should not be any scope for price negotiations except in prescribed circumstances, with reasons to be recorded. Also, there should not be any restriction on the number of bidders, other than on specified conditions.

Currently, there is no overarching legislation governing public procurement by the central government and central public sector enterprises and the General Financial Rules, 2005, govern procurements made by the Centre.

The draft bill is based on the recommendations of the committee on public procurement headed by former bureaucrat Vinod Dhall. The GoM on corruption, formed in January last year, has among its terms of reference, formulation of a transparent public procurement policy.

The bill intends to regulate public procurement by all ministries and central government departments. It also aims at ensuring transparency, fair and equitable treatment of bidders, and promote competition and enhance efficiency and economy in the procurement process.