Govt's e-marketplace (GeM) to touch $25 billion in next three years

GeM (Government e-Marketplace), through which the government buys goods and services for the country's consumption, aims to record more transactions than e-commerce giants Amazon India and Flipkart put together. The government’s public procurement website, GeM has recorded transactions worth $1.5 billion (about 10,000 cr.) at present on its platform, and aims to raise this figure to $25 billion in three years and $100 billion in 7-8 years, says Minister of Commerce and Industry, Suresh Prabhu. Amazon India and Flipkart, including Myntra, on the other hand record online transactions of about $12 billion at present.

The National Mission on GeM was launched by Minister Suresh Prabhu at The Ashok Hotel in New Delhi. This nationwide drive begins from 6th September and will go on till 17th October 2018. During the 6 weeks special drive, the mission will be launched at state headquarters by Chief Ministers and will cover important sectors and flagship programmes, launch of IEC campaign along with training on usage of GeM for buyers and sellers, buyer registration drive to on-board government agencies and vendor registration drive with special focus on MSMEs.

"GeM will be a very valuable possession for the government. If we list it, we don’t know how much value we will get,” the Minister said. “Making profit is not the mandate of GeM as it is registered as a Section 8 company. However, in future, if the government so wishes it has to change the nature of the company into a for-profit one."

The government also intends to allow private companies to buy on the government e-marketplace platform, which will help further lower the cost of goods and services for governments, Prabhu added.

However, Prabhu said the time frame for that will be worked out after verification. “On the GeM platform, we are guaranteeing payment in 10 days. If we register private buyers, we have to make sure they make payment in 10 days. In the government, we can give that guarantee. So we have to put a system in place,” he said.

GeM was founded in August 2016 “to transform the way in which procurement of goods and services is done by the Government Ministries/Departments, PSUs, autonomous bodies etc."

GeM has powered 4.2 lakh products available on its platform through a network of over 1.3 lakh sellers and service providers and these products and services are being bought by over 25K government organisations (Central, State Governments, and PSUs registered on the platform). The portal has been developed by the Directorate General of Supplies and Disposals (DGS&D) with technical support from NeGD (MeitY). 

GeM eliminates human interface in vendor registration, order placement and payment processing, to a great extent. Being an open platform, GeM offers no entry barriers to bonafide suppliers who wish to do business with the Government. At every step, SMS and e-Mail notifications are sent to both buyer, his/her head of organization, paying authorities as well as sellers. Online, cashless and time bound payment on GeM is facilitated through integration with PFMS and State Bank Multi Option System (SBMOPS). Web-services integration is being extended to payment systems of Railways, Defence, major PSUs and State Governments. Seamless processes and online time-bound payment, which is also mandated by the OM issued by Department of Expenditure, has given confidence to the vendors and reduced their ‘administrative’ cost involved in pursuing officers for timely payment.

GeM is a completely secure platform and all the documents on GeM are e-Signed at various stages by the buyers and sellers. The antecedents of the suppliers are verified online and automatically through MCA21, Aadhar and PAN databases. In addition, SEBI empaneled credit rating agencies are also being used for conducting third-party assessment of suppliers. This would further strengthen due diligence about the veracity of suppliers wanting to do business on GeM. For high value bids/RA on GeM, an e-Bank Guarantee is also being introduced.

In two years of its operations, GeM 3.0 has recorded more than 725,000 transactions worth more than ₹11,250 crore and established itself as an open, transparent, efficient and inclusive platform providing huge savings to the government. The portal has nearly 27,000 buyer organizations registered and about 137,000 sellers and service providers offering more than 465,000 products and services for online purchase and contributes to approximately 20-25% average overall savings to the government.