Online public procurement saves govt Rs 525 crore

Government e-marketplace has seen purchases worth Rs 2,100 crore since August 2016

Nearly a year and a half after going live, the government’s showpiece online portal, aimed at turning the public procurement process digital, has managed to save the exchequer an estimated Rs 525 crore, Business Standard has learnt.
 
Till November, the portal, which is still in pilot mode and will see expansion in January, has seen more than Rs 2,100 crore worth of products and services being purchased through it, and has an average saving rate of 25 per cent across purchase categories, Radha S Chauhan, chief executive officer of Government e-Marketplace (GeM), told Business Standard.
 
Inaugurated in August, 2016, the GeM portal has repeatedly been pushed by Prime Minister Narendra Modi as a means to reduce large-scale corruption, hitherto plaguing the estimated Rs 5 lakh crore worth of procurements that the Centre does every year — from pens to SUVs for officials. Only non-administrative purchases such as military hardware, railway equipment and rolling stock are not covered by the GeM.
 

Source : GeM statistics

Source : GeM statistics

However, the portal itself had attracted a fair bit of controversy in April this year, when the Congress party had alleged the process had been subject to corruption.
 
The platform allows public sector bodies to make direct purchases of common-use goods and services. Sellers have to register on the platform and compete with other players in an open-market model.
 
“While we are currently in the process of signing MoUs with all states, most have already started procurement through the portal,” Chauhan said. However, official statistics showed wide disparities in procurement between major states.
 
While Maharashtra topped the list with Rs 123 crore worth of purchases, Madhya Pradesh, Uttar Pradesh, and Delhi followed closely. West Bengal was yet to buy a single item through the portal. Of the top 10 states, six are BJP-ruled states. Interestingly, large, economically strong states such as Gujarat and Rajasthan occupy the 11th and 13th ranks, respectively.
 
While it’s not mandatory for states to source through the GeM, most state governments were expected to switch to it soon, Chauhan said, adding the operations were still based on an experimental pilot model, and would be upgraded significantly in January 2018.
 
Currently, the portal features more than 280,000 products — from office stationery to vehicles, and 9,800 unique services, including those offering driver, florist, sanitation, and laundry services. The total order value stood at Rs 2,480 crore as of late November.
 
The bulk of the transactions were still being done by central government ministries and related agencies, a senior official said. The buying spree of state governments was an estimated Rs 680 crore, while more than double that figure was purchased by the Centre.
 
Figures showed the Ministry of Home Affairs topped the list, with a bill of more than Rs 375 crore, followed by the ministries of human resource development, defence, and communication.
 
While savings are spread across product categories, office equipment, stationery products, and computers have seen the largest gains.