ASCOLA Competition Law series
Edited by Josef Drexl and Vicente Bagnoli
Chapter 12: Benefits of competition policy in public procurement with special reference to India
For most developing and developed countries, government procurement is of great potential interest as it accounts for a substantial proportion of GDP. But the prevalence of discrimination in this area of government procurement, as well as other practices, creates significant barriers to trade, ultimately adversely impacting the countries’ growth and their GDP. Essentially, barriers to efficient and sustainable development are identified as corruption and clientelism in public procurement policies. The WTO is addressing the problem in the form of its Government Procurement Agreement (GPA). And yet, because of the challenges posed by the problems listed above, the GPA, as a mere ‘plurilateral’ agreement, has not been adopted and agreed to by a large number of members of the WTO. This chapter lists the challenges that exist in government procurement and gives an overview of the need for and the features of an appropriate instrument to govern government procurement policies. This chapter also addresses the Indian scenario covering procurement policies, practices and institutions, the reforms undertaken in 2005 and the specific problems and challenges faced by India in this area. In developed and developing countries, the performance of government procurement impacts governance and the interests of citizens. It cannot be gainsaid that performance is positively impacted if procurement is competition driven. For procurement to be pro-citizen interest and pro-good governance, overt and conscious policies promoting effective competition among potential bidders/suppliers are imperative. Absent such policies, a procurement system is unlikely to be healthy.
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