There is no specific central legislation governing procurement of government contracts in India. The provisions of the Constitution of India, as interpreted by the judiciary over the years, are the primary source of law concerning government action for procurement of contracts.
In particular, Article 14 of the Constitution of India has been interpreted as imposing certain standards on the government in the procurement process, such as whether the process adopted, and decisions made by the state , are reasonable, rational, non-arbitrary and non-discriminatory. These principles have been used to test the award and performance of public contracts by the government. For example, in 2012, the Supreme Court of India cancelled allocations of spectrum to private telecoms operators on the grounds that a public auction had not been carried out while making the allocations, and that there was insufficient justification to demonstrate why a public auction should not have been carried out.
Some states in India have their own laws which regulate public procurement by the state government and its entities. For example, the states of Tamil Nadu, Karnataka, Rajasthan, Andhra Pradesh and Assam have laws on public procurement at state level. While even these can be questioned on the basis of constitutional principles, generally these state laws codify the principles established by the courts under constitutional jurisprudence.
There are also certain sector-specific laws, such as in the power sector, which govern some aspects of public procurement.
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