Dr. K. M. George, Secretary-General, Global Millets Foundation & President, Sustainable Development Forum
Introduction: Procurement, Pendency and the Promise of AI
Every democracy, however vibrant, is only as strong as the integrity of its institutions. In India, where the Constitution enshrines justice as social, economic and political, this integrity is tested daily through governance processes as routine as awarding a road contract or as high-stakes as defence acquisitions. Public procurement, though invisible to most citizens, is one of the largest economic activities in any government. Globally, procurement accounts for an estimated 13 trillion US dollars annually. In India, it is estimated that nearly 20 to 25 per cent of the GDP flows through procurement pipelines.
This means that every classroom built, every bridge tendered, every fertiliser purchased, and every vaccine contracted passes through the procurement system. And yet, despite reforms and the introduction of digital marketplaces such as the Government e-Marketplace (GeM), India’s procurement system remains prone to inefficiencies, delays, corruption, and litigation.
The consequences are staggering. The Comptroller and Auditor General (CAG) frequently points out leakages in procurement — ranging from over-invoicing to cartelisation. The Central Vigilance Commission (CVC) issues circulars almost every quarter to plug loopholes. The General Financial Rules (GFR) 2017 attempt to create a modern, rules-based framework. Yet, on the ground, tenders are often delayed, litigated, or cancelled due to procedural lapses and allegations of bias.
The judiciary, as the third pillar of democracy, bears the brunt of this dysfunction. According to the National Judicial Data Grid (NJDG), the official dashboard of Indian courts, there are currently 69,553 civil cases and 18,864 criminal cases pending adjudication that relate directly or indirectly to procurement and contracts. This is not just a number. It represents schools not built, hospitals delayed, and critical infrastructure languishing because disputes must crawl through the legal system.
Against this background, the idea of appointing an AI Minister for Procurement is no longer a far-fetched fantasy. Albania pioneered the experiment in 2023, creating a digital ministerial function where algorithms oversee tender processes. Estonia has long been a global model of e-governance. South Korea is experimenting with AI-enabled judicial assistance, and Brazil’s reverse auction portals are globally studied. India, with its scale and complexity, has both the need and the opportunity to become the world’s first major democracy to institutionalise AI governance at the ministerial level.
This essay argues for the creation of an AI Minister for Procurement in India, beginning with pilots in Kerala and Punjab. It lays out the problem, maps the current procurement ecosystem, examines judicial pendency, draws international lessons, proposes a policy and technology architecture, and offers a roadmap.
The Indian Procurement Landscape: Rules Without Teeth
Public procurement in India is governed by a web of overlapping frameworks:
- General Financial Rules (GFR) 2017: These provide the overarching principles — competition, transparency, fairness, efficiency. Clauses such as Rule 144 specifically bar procurement from certain entities.
- Central Vigilance Commission (CVC) guidelines: These circulars emphasise vigilance, integrity pacts, vendor rotation, and compulsory e-procurement for large contracts.
- Government e-Marketplace (GeM): Launched in 2016, GeM is India’s flagship online marketplace for government buyers. It has recorded billions in transactions and claims significant savings compared to traditional methods.
- State-level PWD manuals: In states like Kerala and Punjab, procurement in infrastructure and public works follows state-specific manuals, often poorly integrated with central rules.
- Sector-specific frameworks: Defence, railways, oil and gas, and health each maintain parallel procurement rules, leading to fragmentation.
Despite these rules, the reality is grim. Tender notices are sometimes vague, pre-qualification criteria restrictive, and bid evaluations opaque. Delays are common, disputes frequent, and blacklisting inconsistent. Even where digital platforms like GeM exist, adoption is uneven across ministries and states.
The fiscal cost of inefficiency is enormous. Studies estimate procurement inefficiencies cost India 1–2 per cent of GDP annually — billions of dollars in lost value. More critically, delays in procurement cascade into delays in project delivery, affecting millions of citizens.
Judicial Dimension: Procurement and Pendency
Procurement disputes occupy a disproportionate share of the courts’ attention. The NJDG data of 69,553 civil and 18,864 criminal cases paints a sobering picture. These are not minor grievances. Many involve questions of fairness, allegations of corruption, and challenges to multi-crore projects.
The Supreme Court has repeatedly weighed in on procurement:
- In Reliance Airport Developers v. Airports Authority of India (2006), the Court underscored the importance of transparency and fairness in tendering.
- In Afcons Infrastructure v. Nagpur Metro Rail Corporation (2016), it stressed that public contracts must balance efficiency with equity.
- In numerous cases since, it has reminded authorities that arbitrariness violates Article 14 of the Constitution.
Yet, despite these pronouncements, litigation thrives. The reasons are systemic: inconsistent documentation, subjective decision-making, and weak grievance redressal. Every dispute that enters the courts adds to pendency, costs, and citizen frustration.
If even 5–10 per cent of procurement disputes could be prevented through upfront AI-based screening of tenders, the judiciary would be relieved of thousands of cases. The fiscal and institutional impact would be transformative.
International Lessons: Albania, Estonia, South Korea, Brazil
Albania: The Pioneer
In 2023, Albania introduced an AI Minister for Procurement, a digital overseer empowered to review tenders, detect suspicious patterns, and flag anomalies. The AI system analyses data points such as repeat winners, sudden bid withdrawals, and price outliers. Early reports suggest fewer disputes and greater bidder confidence.
Estonia: The Integrator
Estonia’s famed X-Road digital backbone integrates all public data — from tax to procurement to contracts. E-residency and digital signatures mean no paper, no delays, and minimal discretion. The lesson for India is that AI cannot function in silos. Integration and interoperability are key.
South Korea: Judicial AI
South Korea has piloted AI systems that assist judges by predicting outcomes in contract disputes and flagging frivolous cases. This reduces burden and accelerates adjudication. India could adapt such models for procurement-related litigation.
Brazil: Reverse Auctions
Brazil revolutionised procurement with transparent online reverse auctions, where vendors compete in real time. Costs dropped, cartelisation reduced, and citizen trust increased. India’s GeM has adopted some of these features but lacks full coverage.
Implication for India: The path forward is not to copy-paste, but to blend — Albania’s oversight, Estonia’s integration, Korea’s judicial foresight, and Brazil’s auction transparency.
The Proposed Indian Model: AI Minister for Procurement
The Indian AI Minister for Procurement can be envisioned as a three-layered framework:
1. Policy Layer
- Legal mandate through amendments to GFR 2017 and notification under the Ministry of Finance.
- Oversight by Parliament, CAG, and CVC to ensure accountability.
- Statutory backing to ensure binding force.
2. Technology Layer
- AI Core: Natural Language Processing (NLP) to read tenders, machine learning to detect anomalies.
- Blockchain Ledger: Immutable, tamper-proof audit trails of procurement decisions.
- Integration with GeM and PFMS: Real-time compliance and payment checks.
- Judicial Dashboard: Automated alerts to courts on high-risk tenders, enabling proactive monitoring.
3. Governance Layer
- Central AI Minister housed within NIC/MeitY.
- State-level AI Procurement Cells, beginning with Kerala and Punjab.
- Independent review board with retired judges, technologists, and civil society representatives.
Pilots in Kerala and Punjab
Kerala and Punjab offer ideal laboratories:
- Kerala: High digital literacy, decentralised governance, and a culture of transparency. AI can be piloted in panchayat-level tenders for schools, roads, and health centres.
- Punjab: Heavy infrastructure spending, frequent cartelisation disputes, and high court involvement. AI can focus on construction tenders and irrigation projects.
Timeline:
- 0–6 months: Legal notification, institutional setup.
- 6–12 months: Pilot tenders in PWD and education.
- 12–24 months: State-wide scaling, integration with GeM.
Comparative Gains and Risks
Gains:
- Cost savings replicating GeM efficiencies nationwide.
- Reduced disputes, easing judicial pendency.
- Faster project delivery, improving citizen trust.
Risks:
- Algorithmic bias excluding smaller vendors.
- Data privacy breaches.
- Resistance from vested interests.
Mitigation:
- Open-source algorithms subject to audit.
- Appeals mechanism for vendors.
- Phased implementation with capacity building.
Way Forward: From Pilots to National Rollout
The AI Minister must be framed not as a ruler but as a guardian of public trust. Its legitimacy must come from transparency, accountability, and inclusiveness.
Kerala and Punjab can demonstrate proof of concept. From there, a national rollout can follow — with the Finance Ministry anchoring policy, NIC providing technology, and CAG/CVC ensuring oversight. Partnerships with IITs, NITI Aayog, and global experts can strengthen design.
Conclusion: A Constitutional Imperative
India spends lakhs of crores annually on procurement. Every rupee misused is a rupee stolen from a schoolchild, a patient, or a farmer. Judicial pendency is not just a legal problem; it is a governance crisis.
An AI Minister for Procurement offers a bold solution. It can cut corruption, ease courts, and deliver services faster. Albania has shown it is possible. Estonia and Korea show integration works. Brazil shows transparency pays.
India, with its scale and constitutional vision, can lead the world. As the Supreme Court has repeatedly reminded us, public procurement must be transparent, non-arbitrary, and fair. AI can make this promise real.
This is not about machines replacing humans. It is about machines protecting citizens from human failings. In a democracy that aspires to global leadership, the AI Minister for Procurement is not optional — it is imperative.
K.M. GEORGE Ph.D.
Secretary General of Global Millets Foundation & President of Sustainable Development Forum
(Formerly Chief of Monitoring and Evaluation , Government of Papua New Guinea; World Bank Monitoring & Evaluation Advisor to Govt. of Afghanistan; FAO Team Leader in Afghanistan; Consultant to ADB, UNDP, UNOPS, UNWOMEN — in Rwanda, South Sudan and North Korea)