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Government E-Marketplace (GeM)

Posted On: 30 NOV 2021 12:46 AM

GeM has transparency, GeM has empowerment, GeM has entrepreneurship. I believe that it is an excellent example of Minimum Government and Maximum Governance, and its objective is Minimum Price and Maximum Ease, Efficiency and Transparency. -PM Narendra Modi

Background:

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 20-22% of the GDP. Therefore, efficient public procurement is an important aspect for achieving accelerated growth and development of the country.
The earlier system consisted of a manual process for invitation of bids, bid evaluation and finalisation of the winning bid.
There were diverse limitations and inefficiencies in the earlier tendering system such as absence of common procurement procedure, manual procedures susceptible to manipulation, cartelization among bidders and paper-based, cumbersome mechanism which became an albatross around the neck.

Genesis:

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.
In August 2016, Government E-Marketplace (GeM) was launched as an end to-end e-marketplace to facilitate transparent, efficient, e-procurement of commonly used goods and services required by Central and State government ministries, departments public sector undertakings and autonomous institutions at competitive prices with assurance of quality and timely delivery.

Before developing its own e-marketplace, some of the biggest e-procurement programs, such as the U.S. General Services Administration and South Korea's ON-line E-Procurement System were analysed to understand global best practices.
The government also amended the GFR (General Financial Rules) and brought about a change in procurement rules, mandating all organizations and departments under the Central Government to procure from GeM.

Functioning of GeM:

GeM helps governments achieve the best value for the taxpayer's 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.
The Special Purpose Vehicle set up to manage the portal is responsible for ensuring adequate publicity of items and vendors available on GeM.
A chat-bot called GeMmy has been launched to assist the vendors and buyers.

GeM made Procurement Process more professional

The integration with the Central Public Procurement Portal is complete and the functionalities of other publishing portals such as the Indian Railway Electronic Procurement System, the Defence Public Procurement Portal etc. are also being brought onto GeM.
Central Government buyers are now required to obtain a "GeM Availability Report and Past Transaction Summary” to make informed procurement decisions which enables buyers to quickly review the availability of their procurement needs on GeM.
Business Analytics tools enable buyers to view the Last Purchase Price, last six month price trends, last six month price trends and Department's own Last Purchase Price on GeM.

Incentive scheme for Buyers and Sellers has been designed maintaining a balance between large and small buyers as well as including parameters related to both value and numbers.
A 'leadership dashboard' with top ranks in each category for both buyers and sellers has been published on the GeM portal where anyone can see the top 20 leading buyers/sellers in each category.

Public Procurement: before and after GeM

Category	Before GeM	After GeM
Process of Invitation of Bids	Manual process for invitation of bids, bid evaluation and finalization of the winning bid.	Completely online, no requirement for physical documentation.
Public Procurement Policy	Multiple agencies with multiple procurement guidelines and procedures.	Single, unified, fully online Public Procurement Portal with clear guidelines.
Method of Procurement	Paper-based procurement procedure with physical interaction.	Contactless, paperless and cashless with time-bound payments and real time monitoring.
Method of Negotiation and Deliberation	Manual negotiation and fixing rates with the bidder and arriving at one rate applicable to all bidders.	Automation and digitization of processes leading to higher process efficiencies & improved transparency.
Process of Registration of Vendors	Registration of vendors was a manual process involving visit by officials to the vendor premises and was a difficult time-consuming process.	Authentication of users is done through API integration with respective domain databases.
Eligible Participants to the Bid	Limited bidding & only registered vendors could participate.	Any vendor of the platform can participate in the bid as long the product matches the bid.
Monitoring of Product Delivered/ Service Provided	Huge delay in delivery of products and delay in payment.	Trust-based platform where there is real time monitoring to ensure on schedule delivery of products and service.

Public Procurement for Sustainable and inclusive growth:

GeM has provided significant opportunities to SMEs, Women SHGs and Start Ups to transact successfully with Centre, States and various Government agencies & organizations. This has not only boosted the Make in India initiative, but also the policy of promoting local SMEs, providing them with market access.
Those under-served sellers now have pan-India market access, an open, fair and transparent system, and have been enabled to leverage the potential of public procurement for their growth. This has led to the generation of both direct and indirect employment.
Special initiatives such as 'Womaniya' to enable women entrepreneurs and women-led self help groups to showcase and sell their products on GeM have been undertaken. It aligns with the Government's initiative of reserving 3 percent in public procurement from women MSME entrepreneurs.
GeM has more than 7,600 Startups, 2,228 Self Help Groups, 4,500 TRIFED members, 1.39 lakh weavers, 39,000 artisans, 56,000 women entrepreneurs, and 26,000 SC / ST entrepreneurs.

Increasing Opportunities for Indian Startups:

A dedicated platform for Startups, 'Startup Runaway' to list their innovative products under 10 globally recognized Startup subsectors was launched on 15th November 2019. This program is an opportunity for Startups to offer products and services that are unique in concept, design, process and functionality to the government buyers with minimal technical specifications.
Till date, 3,981 Startups have registered on GeM and have processed orders worth Rs. 689 crore in Gross Merchandise Value (GMV).
Till date, nearly 3.19 lakh sellers have registered on GeM and have processed orders worth Rs 38,905 crore in GMV, of which approximately 68,286 are MSME sellers who have facilitated orders worth Rs 20,263 crore, in GMV.

Role of GeM during Covid-19 pandemic:

With 1.27 lakh products and 26,000 sellers in COVID-19 categories, GeM has played a critical role in the procurement of products and services required to fight the COVID-19 pandemic in the country.

Since March 2020 to January 2021, nearly 3 lakh orders worth Rs. 4,564.99 crore have been placed in COVID-19 categories by various government organisations.

Impact of GeM:

Increased Public Savings: The average prices on GeM are lowered by at least 15- 20%, up to 56%. The Government to Business (G2B) platform offers products and services by a number of sellers wherein all the Government organisations can procure products and services through a transparent bidding process.
An independent assessment of GeM conducted by the World Bank reported that GeM enabled an average savings of 9.75% on the median price for the period between February 2019 and January 2020, with maximum savings in the top five categories ranging from 23.48% to 60.52%.
Fulfillment of 'Aatmanirbhar Bharat' Vision: GeM 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" as also promoting local products through the "Vocal for Local" initiative.
Efficient and Innovative Procurement System: 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.
Enabling MSMEs to Scale Up: The portal provides an opportunity to MSMEs to scale up business and increase sales. The share of public procurement is close to 20% of GDP.
Public Procurement Process and Delivery on Schedule: As a Business to Government (B2G) platform, GeM has eliminated numerous layers of manual, sequential verification and decision-making, leading to significant reductions in government procurement process.
Future Expansion: The GeM platform is being considered as a game-changing platform to provide impetus to the growth of the MSME sector. As per the Budget 2020-21, the government is looking to increase the turnover of the public procurement portal to Rs. 3 trillion.