By now you must have heard about the introduction of different measures by the government that is initiated under the famous Digital India movement, in order to boost the overall ease of doing business in India.
Be it Startup India, Make in India or BHIM, the government has nearly touched all the basic financial & transactional sectors to make the country a self-sufficient digital ecosystem.
So the initiation of an e-commerce platform isn’t really a surprise, is it?
Yup, we are talking about GeM or the Government e-Marketplace!
Welcome to our blog series “Digital India” where we discuss the various programs under this vast movement taken by the Modi Government. By now we have covered a lot of initiatives, but if you haven’t read about those, we will leave the link down below!
For now, let talk about GeM.
What is GeM?
Established in 2016, under the Allocation of Business Rules, 1961, GeM is basically an online portal for Government officials & agencies to buy & procure products along with services from an end-to-end online marketplace.
It is like any other e-commerce portal whereas a seller you can offer products directly to the government!
Let me give you an example.
Say you are a small-time business owner of office equipment, like files, pens, etc.
Now you want to sell your products to the government. You register your products as a seller on GeM. After the authorization process is done, the government then becomes your buyer & pays you online!
See, it’s just like Amazon or Myntra but for the government & by the government.
The online portal allows for direct purchases of goods up to INR 50,000, and public procurement takes place through bidding and reverse auction.
What is the objective of the GeM?
Now, you may ask, what was the need of GeM?
Well, this portal was actually set up by the government to keep a track as well as identify the several manufacturers & producers under it.
GeM was established to keep a transparent & much faster mode of procurement.
Some of the pivotal objectives of GeM are:
- Create transparency and efficiency in public procurement
- Cost-saving on Government expenditure on procurement
- Create a cashless & paperless transaction
- Easier availability of products and services for Government buyers
What are some of the benefits of GeM?
According to the government, this portal currently procures over Rs 5 lakh crore worth of goods & services, which is quite an impressive amount.
Now, this number couldn’t have been achieved just like that right?
It obviously has some major benefits.
Transparency
As promised by the government, transaction in GeM is quite translucent in this portal.
Elimination of any human interface for vendor registration, order placement or payment processing has made the site devoid of human error.
Due to digital verifications happening at all times to buyers, sellers, their Heads of Departments & the payment processors, there is 100% transparency in the transactions.
Faster & Efficient
There is no paperwork involved. So, obviously the whole process is much fast. And due to the online presence, there is an increased number of online payments taking place on the portal.
Value for money
The prices of the goods & services in the site is generally lowered by at least 15-20%, at times it goes up to even 56%.
Demand aggregation for a lot of the goods and services results in an annual savings of up to Rs. 40,000 crore per annum for the Government.
Security
The authorization is directly coming from the government, for all the sellers. There are multiple checks & verification processes so as you can guess the security is quite tight in the portal.
How GeM is revolutionizing procurement in India?
According to the World Bank blog, our country spends around 20% of GDP on public procurement.
It has been struggling with the challenges of decentralized procurement of commonly used items for quite a long time, which led to the introduction of GeM in the first place.
In a short span of two years or so, the platform has opened up market access for micro and small enterprises and entrepreneurs, expanding the number of potential suppliers.
Along with this, the e-marketplace has also helped promote entrepreneurship and create new jobs.
At present, the portal caters to 320,000 sellers and 41,000 buyer organizations covering 1,784,000+ products and services.
In all, 3,159,000+ orders have been placed so far, with a total value of Rs. 44,300 Cr.!
Also, in 2016, GeM was awarded the South Asia Procurement Innovation Award in 2016, based on its potential & performance in such a less time.
Expectation:
Needless to mention, GeM is expected to result in huge savings for the government.
If reports are to be believed, GeM is expected to result in annual savings up to 5.87 billion per annum.
The e-marketplace has set an ambitious target to achieve Gross Merchandise Value (GMV) equivalent to 4-5% of India’s GDP.
On September 5, 2018, Suresh Prabhu, India’s Commerce Minister said that transactions through GeM will reach $100 billion in the next three years!
Have you checked out their website yet? Here is the link GeM.
Want to build your own e-commerce platform? Contact us at Skyram Technologies. We will guide to & develop the most innovative user-friendly e-commerce portal for your business! Connect with us here!
Interested to read our other blogs about Digital India? Read here!
