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How is the Government e-Marketplace Driving Entrepreneurship and Transparency in India Today?

Government e-Marketplace

Government e-Marketplace (GeM) launched in August of 2016 by Prime Minister Modi has radically transformed public procurement by government in India.

Government procurements which used to reek of corruption has now been cleaned up and given a modern make-over by way of GeM. By taking it online, Government has enabled any MSME manufacturer or start-up to directly sell their products from anywhere in India.

In just little over 3 years, transactions over forty thousand crores has taken place in this platform selling over fifteen lakh products from three lakh sellers.

Bringing Transparency in Government Procurements

Before the implementation of GeM, government procurements were handled by Directorate General of Supplies and Disposals (DGS&D) which traces its origins to British Raj. Like its origins, its rules and regulations were also a relic of British Raj making procurements extremely complex and opaque process.

Following a recommendation from a Group of Secretaries, the Government set up the fully online and transparent GeM in August of 2016 and mandated that all the departments, ministries and Central PSU’s have to source goods and services from its e-marketplace.

The GeM portal has been designed in a way to eliminate any human involvement in the whole process, thus reducing any chances of corruption. From registration, to buying, both the buyer and seller are notified via emails and SMS, thus ensuring that both the parties are kept updated on the transaction’s progress.

Like any e-commerce portal, GeM has a listing of products, divided under several categories. Buyers can search, compare and buy products, similar to any other e-commerce website.

GeM is unique in various ways as it does not operate on any algorithms to support/ promote any product or supplier and also does not solicit any business through advertisements, deep discounts, predatory pricing, Thus GeM focusses on giving balanced and fair access to all suppliers in an agnostic manner in market place. This ensures that all sellers have an equal chance at selling their goods to government agencies without any need to resort to dishonest practices.

Encouraging Digital India

The GeM is also a conscious initiative on the Union government’s part to encourage digital transactions among all ministries. The GeM will ensure all purchase of inter and intra departmental goods and services across ministries is conducted via cashless means. This helps in curbing down any ministerial corruption and leaves a trail due to the online nature of transaction, which could be tracked if necessary

The cashless facility at GeM is integrated with Public Finance Management System (PFMS) and State Bank Multi Option System (SBMOS). These enable smooth cashless transactions across the portal.

Promoting Indian Entrepreneurship

GeM has ensured that any entrepreneur could now place bids to sell his products directly to the government through an honest and transparent process. This has enabled many small MSME manufacturers as well as start-ups to sell to the government and boost their business.

Out of the little over three lakh buyers in the GeM platform, there are 63,000 registered MSME sellers who account for more than 50 per cent of the entire transactional value recorded on the GeM.

Start-Ups have also been special focus on GeM platform by having a special section for called ‘Start-Up Runaway’. Start-Up Runaway is a corner on GeM which provides an opportunity for agile and lean Start-Ups which are registered with DPIIT to reach out to government buyers by offering products and services that are unique in concept, design, process and functionality.

To further enable Start-Ups to be listed on the platform, they have been exempted from prior experience and prior turn-over clause. This has enabled more than 3,600 Start-Ups to operate on GeM and received orders worth more than 522 crores!

Empowering Women Entrepreneurship

8,000 women entrepreneurs are also operating from GeM platform quite successfully. In fact, PM during his 2017 Mann Ki Batt spoke about one of the successful GeM women entrepreneurs Ms Arulmozhi Saravanan of Madurai.

Few years ago, she had heard about the Mudra Yojana of the Union Government which gives collateral free loans to aspiring entrepreneurs and availed one for herself and started a small enterprise making thermoflasks.

During 2017, while browsing GeM for orders, she saw that Prime Ministers Office had placed an order for thermoflasks which she could supply.  she responded to that order and PMO confirmed it. Now her business which began with a Rs 234 on GeM has now crossed an annual turnover of over Rs ONE CRORE.

Arulmozhi Saravanan also wrote regular letters to PM addressing him as father updated him of her business and personal life transformation. Ms Saravanan, who earlier used firewood for cooking, now has moved over to a gas cylinder. She is now planning to give up her cooking gas subsidy. In January of 2019, she met PM Modii when he came to Madurai to lay foundation for AIIMS.

Transparent, simple and the fully digital GeM platform has enabled small town entrepreneurs like Ms Saravanan to sell their goods directly to Prime Minister’s Office and now even make crores in annual turnover!

Future for GeM

GeM already has signed MoU’s with 30 states and UT’s to facilitate their procurements.

The government has also set a target of Rs 5 trillion business through GeM platform in less than 5 years and is considering a series of steps to achieve this goal.

Government plans to widen the ambit of GeM by permitting government contractors as well as private bulk buyers to use the platform for buying goods and services. Currently, they are not allowed to procure goods and services from the GeM platform managed by the Commerce and Industry Ministry.

This will rapidly boost the business in the platform and expose the sellers to an even larger consumer base.