Economic Survey : GeM portal enabled “substantial reduction” in prices of goods for govt procurement

Our Bureau | | Updated on: Jan 31, 2022

Online shopping, e-payment, retail and delivery concept, laptop with shopping cart at center | Photo Credit: elenab

The Government e-Marketplace (GeM), used by all Ministries and government departments to procure goods and services, has enabled substantial savings in the government procurement process.

“The use of this e-marketplace has resulted in a substantial reduction in prices in comparison to the rates used earlier, with average prices falling by at least 15-20 per cent, up to 56 per cent,” the Survey said. It added that prior to the GeM, government procurement prices were much higher than the prices prevailing in the market and there were constant complaints about inefficiency and rent seeking.

The Economic Survey analysed prices of a sample of 22 products (as on January 6), out of which, 10 were found to be cheaper on the GeM portal compared to prices on sites such as Amazon and Flipkart. “While in the last year’s analysis, GeM prices were on an average 3 per cent lower when compared to other platforms, this time it is around 9.5 per cent lower for the chosen sample,” it added.

Take for instance, Ambrane branded powerbank, was listed on GeM at an offer price of ₹1,390, nearly 44 per cent lower compared to other e-commerce sites. Similarly, the offer price of Rorito Greetz Gel Pen, Milton Thermos (1500 ml) and Nilkamal Dustbin (60 litres) on the government’s marketplace was about 133 per cent, 36 per cent and 61 per cent cheaper respectively than other e-commerce sites.

One of the models of Samsung LED TV (43 inches) was listed at GeM at an offer price of ₹40,000 nearly 10 per cent cheaper than Amazon, while a model of Godrej Interio Recliner (3- seater) was priced at nearly 23 per cent cheaper at ₹54,203 on the government portal.

“The maximum savings in the top five categories ranged from 23.5 per cent to 60.5 per cent. The study attributed this, in large part, to increased participation per bid and better price discovery,” the Survey said.

The Survey added that the results of the analysis was broadly in line with the assessment of GeM conducted by the World Bank,which found that the government’s marketplace enabled an average savings of 9.75 per cent on the median price for the period between February 2019 and January 2020.

Published on January 31, 2022
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