Railways and defence procurement to soon be through GeM portal

By September, all general use goods and services will have to procured through GeM, officials said on Thursday

Public procurement by two of the country’s largest government purchasers, the ministries of defence and railways, will soon be subsumed under the Commerce Department’s Government e-Marketplace.
 
By September, all general use goods and services currently purchased through the Indian Railways E-Procurement Systems (IREPS), the Defence e-Procurement portal, and the Central Public Procurement Portal, will have to be made through GeM, officials said on Thursday.
 
IREPS publishes over 30,000 tenders every month and has an online transaction value of Rs 10,600 crore as of mid-2019, according to the Centre for Railway Information Systems.
 
“Under the unified procurement system plan, all portals would be brought under GeM, allowing both the buyer as well as thousands of vendors more clarity and options on the tenders, such as price discovery,” said Tallen Kumar, chief executive officer of GeM.
 
The move is part of a measures dubbed GeM 4.0, that seek to position it as the largest source of public procurement in the country, a long-term aim of the Prime Minister Narendra Modi-led government to reduce corruption, costs, and increase transparency, efficiency and scope of public purchases.
 
Offline buying continues
 
However, government departments registered on GeM continue to make purchases outside the portal. Finance Minister Nirmala Sitharaman said the ministry was looking into Rs 91,000-crore worth of purchases done by government departments and public sector undertakings (PSUs) outside the GeM system, as of October 2019. Senior officials confirmed to Business Standard that this figure has only risen since then.
 
GeM officials stress that the government’s General Financial Rules (GFR), 2017, mandate that all public procurement be routed through the portal. “The rate at which new products and services are being added that will soon make any excuses of products not being available on the portal, redundant,” Kumar said. Official estimates by the commerce department show a target of Rs 50,000 crore in 2019-20, ultimately hitting Rs 1 trillion worth of procurements by 2021.
 
Kumar also clarified that GeM would not be opened up to private buyers anytime soon, as had been announced earlier. The move was set to bring the government in direct competition with major e-tailers, and could happen sometime later, if at all, Kumar added.

New features galore
 
The government will also roll out non-monetary incentives for buyers and sellers for timely payments, seller referral and catalogue corrections, among other actions. These rewards can be used to access benefits like faster approvals and priority help desks.
 
Seen as a step to woo small firms, the government has started offering credit facility to MSMEs (micro, small, and medium enterprises) on GeM through the Trade Receivables Electronic Discounting System (TReDS). It is a bill discounting service supported by Small Industries Development Bank of India for pre- and post-shipment of products.
 
Meanwhile, as small businesses have continued to complain of massive payment delays by government bodies, GeM has pushed the ‘pool accounts’, where states can make advance payment for their purchases but can’t debit, thereby, eliminating the chance of non-availability of funds.
 
Blockchain technology will also be used for the first time for bulk procurement of pharmaceuticals, and automatic generation of provisional receipt certificates. The Uttar Pradesh government will test out the new system. A system of new seller ratings, taking into account buyer and user feedback, apart from transaction history will also be rolled out.
 

The portal has also onboarded most public sector enterprises, banks and state governments. While Goa and Rajasthan have recently started purchasing through the portal, Karnataka remains the only glaring exception that still buys outside GeM, officials said.