Nidhi Chugh Moneycontrol News
Following in the footsteps of advanced economies such as US, India is in the process of making government departments buy all their goods and services from a single platform called Government e-Market (GeM).
What is the GeM?
GeM is a platform developed by the Directorate General of Supplies and Disposals in August 2016, where vendors and government buyers can directly communicate with each other, avoiding additional costs and tedious paperwork.
Government buyers include representatives of the Centre, State, Universities, PSUs and Government Autonomous bodies. The sellers include anyone willing to do business with the government.
Why was the GeM set up?
The GeM was set up to ensure transparency by disclosing who bought what from where and by showcasing the competition between the sellers. It also aims to support the Make In India scheme where vendors have access to the largest customer base.
Business so far
Between August 2016 and April 2017, the GeM has recorded more than Rs 450 crore in total sales. It aims to record sales of Rs 5 lakh crore annually in the future.
How does the GeM work?
From buying ball point pens in bulk to hiring cars, a variety of products and services are available on the GeM at subsidised rates. The buyers can choose from different sellers and post a bid on the portal stating their requirement. Only the sellers registered with the GeM can take up the orders. They can register themselves by giving their Aadhaar details and by paying a fee, which serves as revenue for the marketplace. The order can then be taken up and the delivery date and cost will be stated.
How does the buyer pay?
Only e-payments can take place in the GeM. As of now, the buyer pays via the State Bank MOPS (Multi Option Payment System) and PFMS (Public Financial Management System). State Bank MOPS is an online payment gateway which lets the buyer pay via NetBanking only if they have an State Bank of India (and/or their associate banks’) account. Debit and/or credit cards can also be used to make payments. PFMS is used by government agencies to directly pay the seller by putting money in their account.
Purchases up to Rs. 50,000 are allowed on GeM. As of now, GeM is on the process of speeding up payments to vendors.
What next for GeM?
The government is now searching for private companies to manage GeM., namely Managed Service Providers (MSPs) who will manage GeM’s end-user system and/or its IT infrastructure. This sparked an interest in major e-commerce businesses including Amazon and Flipkart to handle the purchases. Tata Consultancy Services, Accenture and Wipro are also in the race on the infrastructure front.
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