The Cabinet meeting, chaired by Prime Minister Manmohan Singh, approved the public procurement bill that has a provision to debar bidders found engaged in corrupt practices, sources said.
Currently, there is no overarching legislation governing public procurement by the central government and central public sector enterprises. The General Financial Rules, 2005, govern procurements made by the Centre.
The bill provides for a jail term ranging from six months to five years for public servants found guilty of demanding and accepting bribes from bidders of government contracts, the sources added.
It is based on the recommendations of Committee on Public Procurement headed by former bureaucrat Vinod Dhall which were accepted by a Group of Ministers to tackle corruption on February 22. The GoM headed by Finance Minister Pranab Mukherjee had sent the bill for the approval of the Union Cabinet.