Good Governance] Government e-Marketplace brings cheer for MSMEs amid COVID-19 gloom

Since its inception GeM, now has over 1.79 million total registered users, over 6.6 million transactions with a value of more than Rs 1.15 trillion.

Efficient public procurement is an important element of good governance, accelerated growth, and development of the country. This accounts for approximately 20-22 percent of the Gross Domestic Product (GDP). A contactless, cashless, and paperless online marketplace, Government e-Marketplace (GeM) was created in a record five months and introduced in 2016 to replace Directorate General of Supplies and Disposals (DGS&D)'s rate contracts, which were in rigid and had fixed-term contracts. GeM brings transparency, usability, inclusiveness, visibility, and speed of transactions in public procurement. For buyers, there is an average savings of around 10 percent on the median price on this e-Marketplace.

Building a framework

The GeM framework enables governments to get the best bang for the buck for the taxpayer’s money through features and tools such as e-bidding, reverse e-auction, and demand aggregation. Government procurement agencies can now follow global practices in the selection of vendors, quality products, and services through the GeM Platform. Most MSME vendors who are registered are satisfied with these transparent procurement practices that are increasing sales for them. With the government introducing more features to simplify and improve the turnaround time for decision making, more transactions are being logged, which indicates the resultant increased demand. 

In the fight against the COVID-19 pandemic, the Government has relaxed and made procurement easier for medical and protective equipment like thermal scanners, biohazard bags and disinfectants, and the onboarding of oxygen cylinder suppliers. With 186 service categories and 16,301 product categories, GeM, now has over 1.79 million total registered users, over 6.6 million transactions with a value of more than INR 1.15 trillion. To date, 0.69 million registered MSMEs are doing business with 52,042 buyer organisations who are giving them 56 percent of their orders. There was a significant rise in the number of registrations and transactions during April and May 2021.

Registrations of sellers, organization, orders, and their values under GeM as of 31 March 2021:

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GeM can cater to a large volume of transactions and has proved to be a reliable and stable platform. Any order up to Rs 25,000 can be directly placed on available vendors on  GeM if it meets the required quality, specifications, and delivery period. For procurement above Rs 25,000, purchases must be made through structured procedures such as price comparison, bidding, or reverse auction, where the criteria of the lowest price among available suppliers on the GeM must be followed to ensure price efficiency.

To ensure ample publicity of items and vendors available on GeM, special purpose vehicles (SPV) are appointed to manage the portal. The Government of India has made it mandatory for sellers to display the 'country of origin' on products to be sold on the GeM portal.