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A report from the Indian Government's state auditor says preparations for last year's Commonwealth Games were deeply flawed, riddled with favouritism and vastly over budget.

The report, submitted to India's Parliament said there were serious irregularities with bidding and contracts, and that the seven years organisers had to prepare were wasted.

The games cost $4.1 billion instead of the $270 million first estimated, while revenue was only $38 million.

The former head of the Games organising committee, Suresh Kalmadi, is already in jail on corruption charges.

India's Law Minister Salman Khursheed said parliament would reflect on the report and "decide what needs to be done".

Kalmadi's appointment, on the recommendation of the Prime Minister's office despite objections from the then-sports minister, was also criticised in the auditor's report.

India's Government had hoped hosting the 2010 Commonwealth Games in Delhi would showcase its status as an emerging global power, but it was instead deeply embarrassed by construction delays, budget overruns and corruption allegations.

The Comptroller and Auditor General of India's report concluded that the root of the organisers' problems were the model of governance set up in 2003, in which "authority was dissipated, accountability was defused and unity of command was not provided for or followed".

Huge amounts of public money were placed at the disposal of non-government officials unwilling to heed advice from civil servants.

"The modus operandi observed over the entire gamut of activities leading to the conduct of the games was: inexplicable delays in decision making, which put pressure on timelines and thereby led to the creation of an artificial or consciously created sense of urgency," the report said.

"Since the target date was immovable, such delays could only be overcome by seeking, and liberally granting, waivers laid down in government procedures."

Many contracts were awarded after single bids, while some were handed out on a "nomination basis", without any competition.

The exorbitant rates charged by contractors to counter the delays caused huge financial loss to the organising committee and the government.

At the same time, the federal and local governments failed to examine the organising committee's proposals, budgets and actions.

"Appropriate due diligence was conspicuously absent at all levels."

The report said the contract for a timing, scoring and results system was awarded to Swiss timing company, Omega SA, after a rival, MSL Spain, was disqualified irregularly. The contract for building the athletes' village was handed to Emaar MGF Constructions on the basis of a single bid.

Delhi's state government was also accused of wasting at least $29 million with its "ill-conceived and ill-planned" plan to beautify the city before the games.

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