India needs to legislate on government purchases, considering that these account for around 16 percent of the GDP, experts feel.

The government's purchases include all goods and services by ministries, departments and municipal and other local bodies, as also by state-owned corporations and undertakings at the centre and in the states.

A workshop organised here Friday by the World Bank on "Procurement reforms in India" and attended by 150 representatives from various ministries, representatives of the Comptroller and Auditor General and the Central Vigilance Commission, and donor agencies felt a system of reporting is vital to plug loopholes.

"The need for a nodal agency for procurement policy formulation and implementation oversight for the country as whole and creation of a credible appeal mechanism for complaints," were among the recommendations of the workshop.

Coming at the conclusion of a three-phase study initiated by the World Bank in Jan 2000, the participants felt "the need for a Procurement Law at the centre which could be adopted by the states."

They felt that such reforms would help as the General Financial Rules (GFR) essentially covered only the central government and not the states. This was also necessary in the case of public sector units under the central government as the rules do not have the legal backing of legislation.

The workshop was held to disseminate recommendations thrown up by the World Bank study to accelerate purchase reforms in India.

"The public perception of integrity and efficiency of the government is to a large extent swayed by the transparency and integrity of public procurement," said the World Bank.

"This is especially relevant in India where the total value of public procurement today represents 16 percent of the Gross Domestic Product (GDP)," the multilateral body pointed out.

The three-phase study covered the central government and its agencies in the first phase. In the second phase three state governments - Tamil Nadu, Karnataka and Uttar Pradesh - were selected as being the most representative.

The last phase covered over 250 public sector enterprises under the central government.

The aim of the study was to establish international best practices to overcome many of the existing problems in the government system.