The Indian government’s public procurement portal, Government e-Marketplace (GeM), has recently signed a landmark agreement with the Sikkim government. This Memorandum of Understanding (MoU) aims to encourage broader use of the GeM platform among state departments for purchasing goods and services. With this GeM partnership with Sikkim, the marketplace has now established coverage across all states and union territories in India, a major step in expanding digital procurement nationwide.
This article examines the role and impact of GeM in public procurement, the benefits of its partnership with the Sikkim government, and the platform’s continued evolution as one of the world’s largest public procurement portals.
GeM’s Partnership with Sikkim: A Step Towards Inclusive Digital Procurement
The recent MoU with Sikkim will make it easier for state departments to adopt GeM. Through this partnership, GeM commits to assisting Sikkim’s government departments by providing:
- Training and capacity building to help state employees navigate the platform
- Handholding programs to ease the transition to digital procurement
- Focused support to ensure seamless purchasing experiences for Sikkim-based buyers
As of October 23, 2024, Sikkim government buyers have already procured goods worth Rs 90 crore through GeM. The GeM platform has been instrumental in empowering 3,078 Sikkim-based sellers, with 2,720 of them registered as micro-sellers. This partnership ensures that local sellers can access and respond to government tenders more easily.
How GeM Empowers Local Sellers and Small Businesses
The GeM platform enables sellers across India to access bids from various government entities. For Sikkim-based sellers, this means gaining opportunities with not only the Sikkim government but also central government bodies and other states. To date, these sellers have completed orders worth Rs 182 crore. Such growth is essential in a small state like Sikkim, where opportunities for government procurement can be transformative for small and micro-enterprises.
GeM supports sellers by offering a transparent and accessible marketplace where:
- Micro and small businesses can compete alongside larger companies
- Local sellers have greater chances to secure contracts from government bodies
- Financial barriers are reduced through minimized transaction costs for low-value orders
The Growth of GeM: Revolutionizing Government Procurement
Since its launch in August 2016, GeM has transformed public procurement in India. By creating a digital marketplace, GeM offers a one-stop shop for goods and services required by government agencies. In FY23 alone, GeM recorded transactions worth over Rs 4 lakh crore, underscoring its growth as a trusted public procurement platform.
To date, GeM has crossed a gross merchandise value (GMV) or order value of Rs 10 lakh crore. This milestone demonstrates the platform’s scale and importance within the public procurement landscape.
Transaction Charges: Lowering Costs for Sellers
In a significant development, GeM recently revised its transaction charges. On August 9, 2024, the portal announced zero percent transaction fees for orders valued up to Rs 10 lakh. Previously, this limit applied to orders worth up to Rs 5 lakh. This change effectively reduces costs for sellers on smaller contracts, encouraging more businesses to participate on the platform. The adjusted charges have been in effect since the announcement, benefiting a wide array of sellers and enhancing affordability for smaller businesses.
GeM’s Vision: Becoming the World’s Largest Public Procurement Portal
Currently, GeM is the world’s second-largest public procurement platform, only behind Korea’s KONEPS. However, GeM is on track to overtake KONEPS and become the largest public procurement platform by the end of the financial year. This growth reflects India’s commitment to adopting digital solutions for transparent, efficient government purchasing.
GeM’s impact has reached every corner of India, enabling states to procure a variety of goods and services. From office supplies to sophisticated equipment for sectors like health and education, GeM’s catalog covers a wide range of items, meeting diverse governmental needs.
The Role of GeM in Facilitating Efficient and Transparent Procurement
GeM has introduced several innovative features to improve the efficiency and transparency of public procurement:
- Real-Time Analytics: GeM offers analytics for monitoring procurement trends, allowing stakeholders to make data-driven decisions.
- Catalog Management: The platform has a robust system for maintaining product catalogs, ensuring that only high-quality goods and services are listed.
- Digital Payments and Contracts: GeM simplifies payments and contract management through integrated, secure digital systems.
- User-Friendly Interface: GeM’s intuitive design helps government buyers and sellers quickly locate goods, compare prices, and finalize purchases.
- Training Programs: To ensure successful adoption, GeM organizes training sessions and capacity-building initiatives for state buyers and sellers.
Why GeM Matters for Sikkim’s Economy
Sikkim, like many smaller states, relies on small and medium enterprises (SMEs) to support its local economy. Through this GeM partnership with Sikkim, SMEs gain unprecedented access to a large pool of potential buyers, including both state and central government entities. Key benefits of GeM for Sikkim’s economy include:
- Increased Visibility for Local Sellers: Local sellers can now showcase their offerings to a broader audience.
- Economic Upliftment: By securing contracts, Sikkim’s small businesses can grow and contribute more significantly to the local economy.
- Encouragement of Digital Transformation: The GeM platform pushes Sikkim-based businesses to adopt digital tools, essential for long-term growth.
How GeM Addresses Common Procurement Challenges
Traditional procurement systems have long been associated with delays, limited transparency, and bureaucratic inefficiencies. GeM effectively tackles these issues through:
- Elimination of Middlemen: GeM connects sellers and buyers directly, minimizing the chances of corruption or delays.
- Efficiency in Procurement Cycles: With digital processes, GeM significantly reduces the time required to complete purchases.
- Cost-Effective Transactions: Through lowered transaction fees, GeM makes public procurement more accessible and cost-effective for small sellers.
Potential Future Impact of GeM on Public Procurement in India
As GeM grows, its impact on public procurement and economic growth in India is set to deepen. By driving the adoption of digital procurement, GeM could set new standards in government transparency and operational efficiency. Potential long-term impacts include:
- Increased MSME Participation: More micro and small businesses could join the GeM platform, enhancing their access to government contracts.
- Support for Rural and Remote Sellers: GeM’s coverage of all Indian states includes regions that previously lacked access to large procurement opportunities.
- Sustainable Procurement: GeM’s marketplace allows government bodies to prioritize sustainable products, promoting eco-friendly procurement practices.
Conclusion: GeM’s Role in India’s Digital Transformation Journey
The MoU with Sikkim marks another milestone for GeM’s expansion in India. By providing Sikkim’s government departments with digital procurement solutions, GeM is fostering a transparent, efficient, and inclusive public procurement ecosystem. The platform’s recent achievements, including surpassing a GMV of Rs 10 lakh crore and reducing transaction fees, underscore its commitment to empowering small and micro-enterprises.
With its sights set on becoming the world’s largest public procurement platform, GeM is leading the digital transformation of India’s public sector. The portal’s continued growth is crucial for advancing economic opportunities for local businesses and ensuring efficient resource allocation for state and central governments.