A GeM of a marketplace

Richa Mishra | Updated on March 09, 2020

Talleen Kumar, CEO, Government e-Marketplace   -  Kamal Narang

In just four years, the Government e-Marketplace has put in place an efficient and transparent ecosystem for all public procurement

Listening to Jasmeet Kaur, 29, hold forth on the many attractions of GeM, it is easy to fall into the error of imagining that she is excited, in a womanly way, about her collection of ornamental precious stones.

But, in fact, Kaur is a new-age female entrepreneur: her E3 Waste Solutions is a technology-driven solid waste management social enterprise that builds machines and fashions solutions to manage solid waste, and sells them to government agencies.

And the ‘GeM’ that she raves about is not a shiny bit of mineral crystal that is admired as an object of adornment. It is, in fact, the Government e-Marketplace, a transformative initiative by the Narendra Modi government, which has brought all public procurement – of goods and services – onto a single platform that is, at one shot, open, efficient, inclusive, standardised, and transparent.

In other words, it is a GeM of a marketplace that has, in less than four years, ushered in a digital revolution in the process of public procurement by government departments and their autonomous bodies. It has done this by leveraging technology, and making the procurement process contactless, paperless, and cashless. And for this, it has won the BusinessLine Changemaker Award for Digital Transformation.

For countless entrepreneurs like Kaur, who sell products and services to government departments and autonomous bodies, the GeM platform has enabled direct access to sourcing agencies in government, along with transparency and ease of operations.

“We heard about GeM at a workshop during an incubation programme,” recalls Kaur, who continues to additionally operate on traditional marketing channels. “About two months ago, we got our products registered on GeM, and our experience so far has been nice. For start-ups like ours, GeM makes the process of selling to government easy.”

Strength in numbers

GeM is arguably the most impactful initiative under the ‘Digital India’ drive and a milestone on the road to a pure marketplace-based National Procurement Portal of India. Being a government-owned entity, it has its distinctive set of challenges, but it also has a lot to show for itself in the short while that it has been around.

As Finance Minister Nirmala Sitharaman noted in her Budget 2020 speech, GeM is moving ahead with creating a Unified Procurement System for providing a single platform for procurement of goods, services and works.

“It offers a great opportunity for Micro, Small and Medium Enterprises (MSMEs): 3.24 lakh vendors are already on this platform,” she said, and outlined a proposal to take its turnover to ₹3-lakh crore.

Minister for Commerce & Industry Piyush Goyal said GeM has brought in transparency, efficiency, inclusiveness and cost savings. “We have very ambitious plans for it,” he said, adding, “it has reduced the cost of doing business with government. In effect, it has brought government to the people through the concept of ‘Minimum Government and Maximum Governance’.”

Phase I and Phase 2 of the GeM project, envisaged as Proof of Concept (PoC) phases, ran between August 2016 and December 2018. The portal went live with the GeM 3.0 version in January 2018. Hosted on the Government Community Cloud (GCC) of the cloud service provider empanelled by the Ministry of Electronics and Information Technology, the GeM platform abides by the highest standards of industry security systems and encryptions. Its technical partner, a consortium, manages the infrastructure under the supervision and control of GeM officers.

Focus on services

GeM is a marquee initiative: in addition to goods, the portal offers a bouquet of services – from hiring and leasing of vehicles, to manpower services to cloud-hosting services. Going forward, services are expected to be the dominant offering on GeM.

Talleen Kumar, Chief Executive Officer of the Government e-Marketplace Special Purpose Vehicle (GeM SPV), says GeM has ushered in one of the largest change-management exercises in India. “The legacy procurement systems of all Central and State government organisations throughout the country are being realigned with the processes in GeM,” he said. As a rule-based platform that uses analytics, technology and process digitisation tools, GeM has ensured efficient transmission of policy intent, which was a struggle to achieve in an offline environment, Kumar added.

Kaur reasons that being on GeM has helped sellers gain more visibility with procurement agencies. “Our products are patented, and earlier, we were unable to participate in any tendering process for any procurement,” she notes. Under GeM, however, E3 Waste Solutions can sell its products and services to municipal authorities and urban local bodies without having to conform to conventional tendering processes. The buyers also benefit from greater transparency and quality.”

Among E3 Waste Solutions’ other clients are the Oil and Natural Gas Corporation, Indian Oil Corporation, the Indian Air Force, the Central Reserve Police Force, and AGI Infratech. Her company’s flagship solution XAPER, a patented composter, segregates mixed municipal solid waste and bio-dries it, effectively overcoming the challenge of non-segregation. XAPER was recently chosen to manage the fresh municipal solid waste of the East Delhi Municipal Corporation.

How GeM works

GeM’s DNA revolves around participation, collaboration and empowerment. Multiple government organisations, industry associations, banks, SME vendors and other stakeholders have partnered to contribute and enrich the offerings on the platform. The smooth offering of products and services on the marketplace hinges on a harmony between demand- and supply-side entities by way of a consultative approach.

GeM organises special events for stakeholders’ engagement on a continuous basis.

Kathir, co-founder (along with Jay) of Syndicate Impex, a Tirupur-based company that manufacturers garments sustainably under the Ecohike label, says he came across GeM through LinkedIn and enrolled his company two months ago. Syndicate Impex is India’s first garment manufacturing company to get CII-GREENCO certification for sustainability: the company makes T-shirts from recycled plastic bottles.

Kathir says he finds GeM “user-friendly: the online and offline support is great. Even the audit is done through live video, which saved us a lot of time and money.” However, he points out, he finds it a bit challenging to participate in bids on the GeM platform.

The challenges to growth

The GeM team concedes that some challenges remain. There are multiple portals in Central government departments, such as the defence procurement portal, and the Indian Railways eProcurement System, which could limit GeM’s effort to achieve its mandate as the National Public Procurement Portal and provide the benefit of economies of scale and efficiency. “Efforts are being made to make GeM a Unified Procurement System for goods and services procurement,” an official said.

GeM also faces a bit of a challenge in getting all Central organisations to comply with Rule 149 of the General Financial Rules (GFR) 2017, which mandates that all common-use goods and services that are available on the GeM portal should necessarily be procured on the platform.

Suven Bhattacharjee, Director, Med Invent Devices Pvt Ltd, a start-up with globally patented medical devices used in ophthalmic surgery, recently started using the GeM platform. He says the on-boarding experience was pleasant, with a lot of support and hand-holding. “On-boarding requires significant computer knowledge, and the GeM personnel are very proactive in offering help,” he noted. The company is still awaiting its first order.

Simply efficient

According to GeM officials, the portal has simplified the processes of registration, transaction, contracting and payments through easy-to-use and integrated real-time interface across domains. “To achieve this seamless interface, GeM has collaborated with multiple government agencies. Thanks to real-time authentication through these interfaces, the authentication and registration of buyers and sellers is done within 20 minutes. Users are not required to submit any documents in the entire process of registration, transaction and payment,” another official explained.

GeM has moved from paper-based security instruments to electronic securities, such as e-bank guarantees. The portal has overseen a transition from manual payment processes to electronic transfer through seamless integration with payment gateways of buyers and banks. No human interface is involved. The entire cycle of public procurement, from indenting to payment, has been reduced to 10 days on an average.

Asked how reliable the whole process is, an official said, “GeM provides a trust-based, open and inclusive platform. OEMs are for the first time active stakeholders in the public procurement space and help maintain the sanctity of the marketplace through oversight on prices, the product specification and the authenticity of resellers even at the entry point. Prices are kept reasonable by using the services of third-party price comparison portals like PriceDekho.” Besides, the system has adequate checks and balances to ensure that frauds do not happen.

GeM has ambitions to grow in size and become a one-stop shop for both buyers and sellers. It has gotten off to a great start, and is gradually building an efficient and reliable marketplace ecosystem; if it can effectively overcome the challenges that limit its growth, it could go on to be as precious as the shiny mineral crystals that are invoked by its mere name.

Published on March 09, 2020

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