New Delhi, Feb 5 (IANS): Finance Minister Arun Jaitley on Monday said the government cannot act like a commercial entity even when it comes to the "commercial activities of the State", and cannot just "pick and choose" in matters of public procurement.

He said a "pick and choose" system could not only lead to unfairness, but at times, it could also lead to "very serious allegations of corruption and nepotism".

"From a concept which existed decades ago that the State was free to act as any other commercial entity was free to act, we've now moved to the other end of spectrum where the State can only act in a particular manner when it comes to public procurement," Jaitley said at the South Asian Regional Procurement Conference here.

He said when it comes to matters of procurement, awarding contracts, and even public-private contracts, there has to be procedural fairness that the governments have to follow.

"Now this procedural fairness would also ensure that it could eliminate all elements of nepotism, favouritism. No accusing fingers would be cast.

"It would ensure transparency and would also ensure that the State is able to manage for its citizens the best price and the best quality in terms of its procurement, which in turn would turn to best pool of services it gave to its own citizens," Jaitley said.

He said while there was a time when it was perceived that the State was going to be no different than from other commercial entities when it came to commercial activities of the State, but things changed due to interplay of norms of civility and fairness.

This interplay led to a new belief across the world that State action had to be different, he said.

"Every State action had to be dictated by norms of fairness and had to have an element of transparency. It had to be dictated by reasons which had to be relevant, cogent and rational."