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Govt targets Rs 50,000-crore of public procurement through GeM in FY20

Subhayan Chakraborty/New Delhi 15 Apr 19 | 11:29 PM

Three years after its inauguration, the government e-marketplace (GeM) has seen the cumulative procurement by the central and state governments reach Rs 24,183 crore at the end of 2018-19.

All public sector agencies are mandated to directly purchase common-use goods and services through the online portal. Official estimates by the commerce department show a target of Rs 50,000 crore in 2019-20, ultimately hitting Rs 1 trillion worth of procurements by 2021. However, this will still be much lower than the total gamut of government procurement in the country, currently at Rs 5.5 trillion. 

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In the last financial year, more than 1.7 million separate orders were placed on the portal, up from 300,000 orders in the preceding year.

The current growth projections eye an estimate of Rs 50,000 crore worth of orders in 2019-20, of Rs 5.5-6 trillion total procurement made annually by the government. But even a single state is yet to transfer its total purchasing to the platform, an official said. While 20 states have signed a memorandum of understanding with the GeM authority, Uttar Pradesh, Maharashtra and Madhya Pradesh remain the largest buyers.

The GeM portal now features more than 896,000 products, from office stationery to vehicles and, 8,366 services, including transportation, logistics, waste management, web casting and analytical, among others.

Many of these services and products have now been open to the more than 15,000 start-ups recognised by the Department of Industrial Policy and Promotion (DIPP), and start-ups keen to be a part of this ecosystem. More than 1,787 startups are on board, sources said. 

The government is also aiming to push more micro, small and medium enterprises (MSME) onto the platform. Currently, more than 28,000 MSMEs more than Rs 1 trillion worth of procurement is done nationally by 170 Central Public Sector Enterprises (CPSEs) through GeM.

Seen as a step to woo small firms, the government has started offering credit facility to MSMEs on GeM through the Trade Receivables Electronic Discounting System (TReDS). It is a bill discounting service supported by Small Industries Development Bank of India for pre- and post-shipment of products. As small enterprises find it difficult to deal with payment delays, GeM is ensuring that this issue will be resolved for MSMEs who can now avail the TReDs facility.

The GeM platform is also being used to place orders for World Bank projects. MoUs have also been signed with 12 banks to facilitate payments. The platform is also closely monitored by the Prime Minsters Office, with the Cabinet Secretary holding a review meeting every 3 months with the committee of secretaries and regularly.

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