Public Procurement through Government e-Marketplace (GeM) to Boost MSME Sector

Public procurement is the purchase of goods and services on behalf of a public authority and forms an important aspect of Government activity. The Government e-Marketplace (GeM), launched on 9 August 2016 is a unique one stop portal for online procurement of goods and services of common use by all Government departments, organizations and public sector undertakings and is a bold and effective step in transforming the way in which Government Procurement is done.

GeM is an outcome of the recommendations of the Group of Secretaries to the Hon’ble Prime Minister. With the total value of procurement exceeding more than INR 5 lakh crore per annum, GeM could be a game changer for Government-industry transactions. By infusing efficiency and transparency in the public procurement system and aiming to curb illegal practices by reducing administrative interface, the Government has ushered in significant structural changes in the procurement process by launching the GeM platform.

GeM is a state-of-the-art public procurement platform that uses technology to remove entry barriers for sellers and has created a vibrant marketplace with a wide range of goods and services. By facilitating industry and entrepreneurs to do business with the Government, GeM greatly contributes to India’s Ease of Doing Business Rankings.  Presently there are more than 300000 products, 47279 sellers and 18230 buyer organizations associated/registered with GeM. As GeM has taken the entire process of public procurement online, it is also a step in India’s digital journey.

For promoting manufacturing and services with a view to enhancing income and employment and bolster the Make in India initiative, the Government issued Public Procurement (Preference to Make in India) Order during June 2017, under which purchase preference will be given to local suppliers in all procurement undertaken by procuring entities.

GeM to boost the Indian MSME sector

The Micro, Small and Medium Enterprise (MSME) sector is the backbone of the Indian economy and plays a pivotal role in the development of the country’s industrial sector as well as the overall economic growth of the country. In particular, MSMEs contribute around 7% of the manufacturing GDP, 33.4% of the manufacturing output and provide employment to around 120 million people in the country.

GeM is a great platform to boost the MSME sector. By facilitating business between the Government, Industry and entrepreneurs online, GeM helps in improving the quality and efficiency of the products and services on offer, particularly the ones sourced from the MSME sector.

The MSMEs can bid for market tenders free of cost through the e-Procurement portal. This would allow MSMEs to actively participate in various Government Procurement programs. This would also enable the Public Sector Enterprises (PSUs) to achieve the mandatory 20% procurement from SMEs as stipulated in the Procurement Policy of 2012 and further contribute to the growth of MSMEs.

The Government has undertaken several initiatives in recent times to enhance the growth of the MSME sector such as the “Pradhan Mantri Mudra Yojana” under which loans of up to Rs. 10 lakh are given to small/micro business enterprises with the help of banks and Micro Finance Institutions, with the objective of creating an eco-system to facilitate entrepreneurial activities and strengthen the financial growth of micro enterprises. More than 8 million loans have been given out under this scheme, with youth emerging as job creators rather than job seekers.

Further, the Government also launched the MSME Samadhan Portal during October 2017 to resolve issues in case of delayed payments to MSMEs. The MSMEs under this scheme can register their cases online which would be taken up by the concerned Micro and Small Enterprise Facilitation Council (MSEFC), to be established by the state governments.

Most recently, on 8 December 2017, the Government launched the MSME Sambandh Portal, to monitor the implementation of Public Procurement from MSMEs by Central Public Sector Enterprises (CPSEs). The MSMEs would be able to access the information about various products through this online portal. The minimum 20% mandatory procurement of total products and services produced by MSMEs by Central Government Departments/CPSEs could also be assessed effectively through this portal. Overall, the system will enhance ease of doing business for MSMEs and thus provide a further boost to the Government’s Make in India initiative.

Industry’s Role in Facilitating Public Procurement

Confederation of Indian Industry (CII) signed a Memorandum of Understanding (MoU) with GeM with the objectives of promoting dialogue between GeM and its suppliers, resolve any issues faced by the suppliers and raise awareness about GeM related issues. The agreement also helps Industry to better understand the needs of the buyers.

Keeping in mind these objectives, CII hosted a two day National Public Procurement Conclave in partnership with GeM during 11-12 December, 2017 in New Delhi. A knowledge sharing and B2B platform for buyers and sellers, the conclave included seminars, technical sessions, master classes, exhibition of products and services and B2B meetings with buyers and sellers that provided an opportunity for buyers and sellers to interact with one another, share their experiences and take valuable insights and learnings on public procurement.

Hon’ble Minister of Electronics and Information Technology, Culture and Tourism, Shri Alphons Kannanthanam at the conclave stated that removal of corruption was the biggest feat of the Government and by providing a transparent process of procurement, GeM prevents public money from being eaten away. He further added that GeM will benefit the manufacturers and enable the Government to save a lot of money and that it was “the face of true reform”.

GeM is a win-win situation for both the suppliers and the Government and will encourage enterprises to access the large market of goods and services demanded by the Government and make it easier to do business with agencies and departments. Industry applauds this great initiative by the Government to enhance buyer-seller participation and is committed to spreading awareness about GeM as its partner and assist industry bodies and the Government through its various initiatives.



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