Technological Advances Help GeM Clock INR 40K Cr In Public Procurement Transactions

Government-e-Marketplace (GeM), launched by the ministry of commerce in 2016, has clocked INR 40K Cr in public procurement transactions.

The government had recently revised the general financial rules (GFR) and procurement manuals and made advances in the use of technology in procurement to drive growth. “The efficiency of procurement makes a big difference to the fiscal discipline of the government,” expenditure secretary TV Somanathan was quoted as saying by ET.

All the purchases through the GeM were also recently made mandatory by the Ministry of Finance through Rule No.149 in the General Financial Rules, 2017. The total number of government buyer organisations registered on GeM portal is 40,745 and the total number of sellers and service providers registered on GeM portal stands at 3,04,462, as on December 3, 2019.

“We have the GeM, central procurement portal, which currently has electronic bids of 1,00,000 tenders – including state government tenders. And we have (Rs) 18-19 lakh crore per annum, of tendering on central public procurement portal (CPPP),” Somanathan said while addressing the Global Procurement Summit 2020.

The platform was launched with the objective of creating an open and transparent procurement platform for the government. “The global government procurement economy is estimated at $10 Tn in value; and in most countries, including India, it constitutes more than one-fifth of GDP taking into account central, state government and public sector undertakings,” Somanathan added.

Various efforts were taken in 2019 to scale up the public procurement platform. For instance, the government worked on formulating a mechanism to ensure timely payment to vendors and rating buyers and sellers. The services listed on its platform include transportation, logistics, waste management, webcasting and analytics among others.

Commerce minister Piyush Goyal recently said that the GeM portal has resulted in an average saving of around 15-25%. However, the savings for the automobile sector stands a bit low at 12%. The reason cited for the same is the overall ongoing slowdown of the auto industry.

“One of the problems we continue to face in many of the PPPs is how do we deal with unanticipated risks and changes that are not specifically provided for in contracts,” Somanathan said.