Government e-Marketplace (GeM), a national public online procurement platform, aims to record more transactions than the private ecommerce giants Amazon India and Flipkart put together, announced Minister of Commerce and Industry and Civil Aviation Suresh Prabhu during the launch of the National Mission.
The National Mission on GeM was launched by Prabhu on Wednesday (September 5) to accelerate the adoption and use of GeM by central ministries, state governments, and their agencies.
National Mission on GeM launched by Sh Suresh Prabhu, Minister of Commerce and Industry at The Ashok Hotel in Delhi. This nationwide drive is from 6th September to 17th October 2018.#BuyersonGeM #SellersonGeM@DoC_GoI @sureshpprabhu @crchaudharymos @phdchamber @dgftindia pic.twitter.com/vmCrqApijp
— GeM (@GeM_India) September 5, 2018
Founded in August 2016, GeM is an online platform for the purchase of goods and services for the central and state ministries, departments and authorities. There are currently 27K buyer organisations, 138,317 sellers and service providers registered on the platform. The portal claims to have listed 472,711 products so far.
Prabhu emphasised that GeM would enable transactions worth $25 Bn in the next three years and $100 Bn in the next seven to eight years.
GeM recently completed two years of operation and claims to have facilitated more than 6.16 Lakh transactions worth a total of $1.45 Bn (INR 10K Cr) in gross merchandise value (GMV) on the platform.
Private ecommerce players such as Amazon India and Flipkart have recorded online transactions worth $12 Bn till now.
Related Article: Govt To Open Its eMarketplace To Startups
Even though the marketplace is raking in good revenues, it is unlikely to be listed on the equity market as it has been registered as a not-for-profit company.
About this, Prabhu said, “GeM will be a very valuable possession for the government. If we list it, we don’t know how much value we will get.”
One of GeM’s executives said at the event that making profits is not the mandate of the platform as it is a Section 8 company, which means it is registered under the Companies Act, 2013, for charitable or not-for-profit purposes. So, if the government wishes to list it in future, it would have to change the nature of the company into a for-profit one.
Inc42, in February, reported that the Government e-Marketplace might touch $7.8 Bn (INR 50K Cr) worth transactions in 2018 and that the platform hoped to reach transactions worth $31.2 Bn (INR 2 Lakh Cr) in the coming years.
GeM To Allow Private Companies To Buy From Its Platform
The Centre also intends to allow private companies to buy on GeM, which will help in lowering the cost of goods and services for state governments as well as companies in the future.
“If somebody else wants to buy on the GeM platform, they will also be allowed to do so. If volume increases, the price will also come down and this will benefit both the government and private parties,” Prabhu said.
The minister also emphasised that since GeM guarantees payments in 10 days, of it, registers private buyers, the platform has to make sure they make payment in 10 days. A time frame would have to be worked out to ensure this, after verification of the private buyers.
In the two years of its operations, GeM has recorded about 725K transactions worth more than ₹11,250 Cr. The platform has registered about 27K buyers and 137K sellers that offer more than 4,65K products and services online. GeM contributes to approximately 20-25% average overall savings to the government.
The platform now aims to make savings worth 1% of the GDP in the next three years and has set the ambitious target of eliminating the fiscal deficit of the government through such savings.
[The development was reported by Livemint.]