GEM of an idea - the Government e-Marketplace

The GeM portal is becoming bigger with time, and holds good promise for the future.

 GEM of an idea - the Government e-Marketplace

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• The story: Governments of India procure lakhs of crores worth of materials each year, for their need. While all this has been decentralised since the 1950s, it was rife with cost overruns, corruption and general inefficienies. The GeM system promises to changed it.
• GeM: The Government e-Marketplace (GeM) system, it is claime, has resulted in a 10% savings in public procurement costs in five years, but has still tapped only 5% of India’s total government purchases of about Rs 20 lakh crore a year. And, 56% of the order value processed through the GeM portal has been delivered by Micro, Small and Medium Enterprises (MSMEs), with seven lakh small firms on board.
• Details: The GeM is a one-stop National Public Procurement Portal to facilitate online procurement of common use Goods & Services required by various Central and State Government Departments/Organizations/Public Sector Undertakings (PSUs).

1. The procurement of goods and services by Ministries and the Central Public Sector Enterprises (CPSEs) is mandatory for goods and services available on GeM.
2. It provides the tools of e-bidding and reverse e-auction to facilitate the government users achieve the best value for their money.
3. At present, GeM has more than 30 lakh products, over Rs. 10 lakh crore worth of transactions have happened so far at the portal.

• History: The GeM was launched in 2016 to bring transparency and efficiency in the government buying process. The Ministry of Commerce and Industry was the nodal ministry.
• Country of Origin made compulsory: The GeM made it mandatory for sellers to enter the Country of Origin while registering all new products on GeM. This was enabled so the buyers can choose to buy only those products that meet the minimum 50% local content criteria.
• Importance: The GeM is enabling quick, efficient, transparent and cost-effective procurement, especially when government organizations require products and services urgently to fight against the Covid-19 pandemic.

1. GeM also promotes the Atmanirbhar Bharat policy, introduced in the wake of the Covid-19 pandemic, meant to encourage self-reliance and boost small Indian manufacturers.
2. Entry of small sellers - The Marketplace has facilitated entry of small local sellers in Public Procurement, while implementing ‘Make in India’ and MSME Purchase Preference Policies of the Government in the true sense.
3. Multiple entities at one place - The online marketplace can aggregate demand from multiple entities for similar products, and build on the preferences provided by State governments to small enterprises.

• Problems: First, there are multiple portals in Central government departments, such as the defence procurement portal, and the Indian Railways e-Procurement System, which could limit GeM’s effort to achieve its mandate as the National Public Procurement Portal and provide the benefit of economies of scale and efficiency. Then, there the problem in getting all Central organisations to comply with Rule 149 of the General Financial Rules (GFR) 2017, which mandates that all common-use goods and services that are available on the GeM portal should necessarily be procured on the platform.
• Summary: The government wants the GeM to grow in size and become a one-stop shop for both buyers and sellers. It is gradually building an efficient and reliable marketplace ecosystem. One day, it truly could be the government's own Amazon.

 

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