Procurement of goods and services from government portal Government e Marketplace (GeM) has crossed Rs 1 lakh crore during this fiscal on account of a sharp increase in buying activities by different ministries and departments.

Earlier, the portal had crossed the Rs 1 lakh crore mark in about four-and-a-half years, but now this was achieved during the current fiscal.

Procurement by central public sector enterprises (CPSEs) rose multifold to about Rs 43,000 crore.

Government e Marketplace

• Government e Marketplace is a government-owned Section 8 company set up under the aegis of department of commerce for procurement of goods and services by central and state government organisations.

• Public procurement involves purchase of goods and services by governments with an aim to not only carry day-to-day tasks but to also create social and economic infrastructure.

• In India, public procurement accounts for roughly 20 per cent of the GDP and therefore, an efficiently run public procurement process is critical to the  economy.

• In order to improve transparency of decision-making in the public procurement process and to reduce malpractices, the Union government decided to set up an online marketplace for public procurement.

• Government e Marketplace (GeM) is the national public procurement portal offering end to end solutions for all procurement needs of central and state government departments, PSUs, autonomous institutions and local bodies. 

• Since its commencement on August 9, 2016, GeM has transformed public procurement in the country by leveraging technology and making procurement contactless, paperless, and cashless.

• The platform reduces manual process inefficiencies and human interventions in procurement and enables increased coverage, access, and efficiency of faceless, standardised public procurement.

• It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users, achieve the best value for their money.

• The purchases through GeM by government users have been authorised and made mandatory by the ministry of finance by adding a new Rule No.149 in the General Financial Rules, 2017.

• GeM has over four million sellers and service providers, five million products and a transaction value of Rs 2 lakh crore.

• To promote inclusivity, GeM is integrating with panchayati raj institutions to allow online buying and selling by panchayats.

• The portal is in an advanced stage of integration with India Post for extending logistic services at the grassroots level.

• Several new features have been added in the portal including a buyback mechanism which enable buyers to replace old products and get additional discount/buyback .

• Over 10,000 startups have registered on the platform so far.

• The top five states that are buying from the portal include Uttar Pradesh, Delhi, Gujarat, and Madhya Pradesh.

• The portal provides a wide range of products from office stationery to vehicles. Automobiles, computers and office furniture are currently the top product categories. Services, including transportation, logistics, waste management, web casting and analytical, are listed on the portal.

Functioning of GeM:

• GeM helps governments achieve the best value for the taxpayers’ money by carrying out efficient public procurement using tools such as e-bidding, reverse e-auction and demand aggregation.

• GeM has provided the government procurement agencies an option to select MSME vendors for procurement which has helped MSMEs to significantly increase their sales.

• Any procurement up to Rs 25,000 can be directly purchased from available vendors on the GeM if it meets the required quality, specification and delivery period.

• For procurement above Rs 25,000, purchases have to be made following procedures such as price comparison, bidding or reverse auction, where the criterion of the lowest price among available suppliers on the GeM has to be followed to ensure price efficiency.

• A chat-bot called GeMmy has been launched to assist the vendors and buyers.

Impact of GeM

• The transparency, efficiency and ease of use of the GeM portal has resulted in a substantial reduction in prices, in comparison to the tender, rate contract and direct purchase rates.

• An independent assessment of GeM conducted by the World Bank reported that GeM enabled an average savings of 9.75 per cent on the median price for the period between February 2019 and January 2020, with maximum savings in the top five categories ranging from 23-60 per cent.

• GeM has drastically brought down waiting time for buyers and ensured timely payments to the sellers. 

• It has facilitated efficient transmission of policy intent by implementing the ‘Make in India’ policy and the MSE policy on its portal and providing impetus to the vision of ‘Aatmanirbhar Bharat’ and also promoting local products through the ‘Vocal for Local’ initiative.

• GeM has enabled various modes of procurement and made available various analytical tools to facilitate buyers to make informed decisions while making procurement. 

• A public procurement system which is completely transparent not only improves the government functioning but also encourages greater participation from private firms in the bidding process.

• The portal provides an opportunity to MSMEs to scale up business and increase sales.

• GeM has created a Unified Procurement System for the country by bringing the functionalities of the Defence Public Procurement Portal, the Central Public Procurement Portal and its sub-portals onto GeM to provide a single user experience.

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