• Union home and cooperation minister Amit Shah launched the onboarding of cooperatives into the Government e-Marketplace (GeM) portal.

• The minister also pitched for reforms in cooperative societies. 

• On June 1, the Union Cabinet had approved the decision that enables registration of cooperatives as buyers on the GeM platform.

• The move will help over 8.54 lakh registered cooperatives and their 27 crore members, as they would get products at competitive rates from the GeM portal.

• Over 300 cooperatives have been onboarded as buyers on the GeM portal to help them purchase goods and services at competitive prices.

• In the first phase, all eligible cooperatives, having a turnover/deposits of Rs 100 crore, will be able to start placing orders on the GeM portal.

Government e-Marketplace (GeM)

• 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. 

• A special purpose vehicle (SPV) by the name of Government e-Marketplace (GeM SPV) was set up as the national public procurement portal.

• 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.

• 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, webcasting and analytical, are listed on the portal.

• The annual gross merchandise value from the GeM platform has increased from Rs 16,972 crore in 2018-19 to Rs 1,06,760 crore in 2021-22.

• About 61,851 government buyers and around 48.75 lakh sellers and service providers are registered on the GeM and they have listed more than 45 lakh products in over 10,000 products and 288 service categories.

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.

What is the significance of onboarding cooperatives on GeM?

• As per the existing mandate, goods and services registered on the GeM portal are not available for use by private sector buyers. Suppliers (sellers) can be from across all segments — government or private.

• The cooperative movement in India has grown significantly, playing an important role in addressing the developmental needs of underprivileged classes in India, especially in agricultural, banking and housing sectors. 

• There are currently 8.54 lakh registered cooperatives. These cooperatives collectively procure and sell in large quantities. 

• Allowing cooperative societies to register on GeM as buyers would help cooperatives in getting competitive prices through an open and transparent process.

• Since the societies have more than 27 crore members, procurement through GeM would not only economically benefit the common man, but would also enhance the credibility of the cooperatives.

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