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Source– The post is based on the article “The GeM In What Govt Buys” published in “The Times of India” on 20h April 2023.
Syllabus: GS2- Government policies and interventions
Relevance– Issues related to government procurement
News– The Government e Marketplace (GeM) crossed a historic milestone at the end of 2022-23: Government agencies purchased goods and services worth more than Rs 2 lakh crore through more than five million online transactions in a single financial year.
What are some facts about Government e Marketplace?
The portal was launched to align public procurement of goods and services with the government’s mission of ‘Minimum Government and Maximum Governance’ and his strategy of using technology to make government systems honest, effective and accessible to all.
The journey began with business worth Rs 422 crore in 2016-17.
GeM has grown spectacularly since it was set up in August 2016. The total value of transactions on the portal almost doubled in 2022-23 to Rs 2. 01 lakh crore from Rs 1. 07 lakh crore in the previous fiscal.
What is the difference between the earlier system and the new system of procurement?
Earlier the system was riddled with inefficiencies and corruption. Government procurement used to be opaque, time-consuming, cumbersome, and prone to corruption and cartelization.
Only a privileged few could break through huge entry barriers.
Buyers had no choice but to purchase sub-standard goods at high, non-negotiable rates from the privileged suppliers.
Potential sellers were completely at the mercy of the facilitating agency, to get empaneled, and then to get timely payments.
In the new system, there is hardly any human interface in vendor registration, order placement and payment processing. At every step, SMS and e-mail notifications are sent to the buyer, the head of her organisation, paying authorities and sellers.
The paperless, cashless and faceless GeM gives buyers the freedom to buy goods and services directly from unlimited sellers at competitive rates.
What shows the success of the GeM portal?
An independent study conducted by the World Bank and IIM Lucknow estimated an average 10% savings from the median price. The World Bank noted that with the addition of every new bidder, savings increased by 0. 55%.
A study by Boston Consulting Group (BCG) showed that annual cost savings in 2021-22 were in the range of 8%-11%.
The portal is home to more than 11,500 product categories. It has over 3. 2 million listed products. It has over 280 service categories with more than 2. 8 lakh service offerings.
GeM is catering to diverse procurement needs of more than 67,000 government buyer organizations, which have together saved about Rs 40,000 crore. It gives equal opportunity to all buyers and sellers.
About 60% of orders by value from states have gone to micro and small enterprises. States have also placed orders worth Rs 1,109 crore on startups. It demonstrates the ease of access for the relatively underprivileged business people.
