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Government e-Marketplace

  • 10 Aug 2021
  • 4 min read

Why in News

The Government e-Marketplace (GeM) system 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.

Key Points

  • About:
    • 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).
    • The procurement of goods and services by Ministries and the Central Public Sector Enterprises (CPSEs) is mandatory for goods and services available on GeM.
    • It also provides the tools of e-bidding and reverse e-auction to facilitate the government users achieve the best value for their money.
    • At present, GeM has more than 30 lakh products, over Rs. 10 lakh crore worth of transactions have happened so far at the portal.
  • Launch:
    • It was launched in 2016 to bring transparency and efficiency in the government buying process.
  • Nodal Ministry:
    • Ministry of Commerce and Industry.
  • Recent Updates:
    • Bamboo Market Window (The Green Gold Collection).
    • Country of Origin Mandatory: GeM has made it mandatory for sellers to enter the Country of Origin while registering all new products on GeM.
      • This has been enabled on the portal so that the buyers can choose to buy only those products that meet the minimum 50% local content criteria.
  • Significance:
    • Transparent and Cost-effective Procurement: 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.
    • Promotion of Atmanirbhar Bharat: GeM has been promoting the Atmanirbhar Bharat policy, introduced in the wake of the Covid-19 pandemic, meant to encourage self-reliance and boost small Indian manufacturers.
    • Entry of Small Local 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.
    • 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.
  • Challenges:
    • Multiple Portals:
      • 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.
    • Lack of Compliance:
      • It also faces a bit of a challenge 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.

Way Forward

  • GeM has ambitions to grow in size and become a one-stop shop for both buyers and sellers. It has gotten off to a great start, and is gradually building an efficient and reliable marketplace ecosystem.
  • If it can effectively overcome the challenges that limit its growth, it could go on to be as precious as the shiny mineral crystals that are invoked by its mere name.

Source: TH

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