20-22% of India's gross domestic product (GDP) comes from public procurement.Considering the Indian economy's size as USD 2.7 trillion, this amounts to a staggering USD 500 billion annually.
The Government e-Marketplace (GeM) is a path-breaking revolution in India's public procurement. The GeM is the national public procurement portal for an online, end-to-end marketplace for open, efficient, and transparent procurement of goods and services by Central and State Government organisations.
Public procurement, i.e., government agencies' purchase of goods and services, is an important economic activity for countries worldwide.
20-22% of India's gross domestic product (GDP) comes from public procurement. Considering the Indian economy's size as USD 2.7 trillion, this amounts to a staggering USD 500 billion annually.
Out of this, about USD 100 billion of goods and services are amenable to procurement from a marketplace like Government e-Marketplace "GeM" annually.
We cannot underestimate the importance of driving efficiency, transparency, and effectiveness in this crucial government function in this context. It is a prerequisite to promote resource efficiency and prevent mismanagement and corruption in public procurement processes. With this in mind, India's Government adopted the mandate for a transparent, cashless, contactless, and paperless digital initiative to streamline public procurement on August 9, 2016. The Government of India decided that a platform called the GeM will be developed and implemented as a comprehensive national public procurement portal.
The intent was to enable the procurement of goods and services required by Central and State government organisations. To streamline the public procurement of goods and services, India sets up the GeM platform. Over the past four years, GeM has steadily emerged as an exemplar and revolutionised India's public procurement regime through its online, end-to-end marketplace. GeM facilitates the open, efficient, and transparent procurement of goods and services by central and state government agencies in India.
The number of product categories has increased to 6,581 from about 3,486 a year ago. Similarly, the number of service categories has increased from 75 to 121. The number of buyers has increased from 0.035 million to 0.045 million. We also find that the number of sellers has gone up from 0.229 million to 0.388 million. The number of sellers in the category of micro, small, and medium enterprises (MSME) has increased from 0.038 million to 0.1 million, the number of products has increased from 0.934 million to more than 1.8 million, and the cumulative gross merchandise value has increased from INR 300.31 billion to INR 543.36 billion.
GeM platform used technology, analytics, and digitisation of processes to transform the legacy procurement systems previously in place. It developed a disruptive marketplace model in what is perhaps one of the most complex change management processes in government technology in India and globally.
The Government of India's commitment to the three pillars critical to realise the ambitious vision of a genuinely self-sufficient nation or "Atmanirbhar Bharat" (self-reliant India) underlined the design development, and implementation of the platform. Firstly, it promotes inclusivity by dramatically reducing the cost of doing business and providing typically under-served sellers pan-Indian access to buyers from Government agencies. Secondly, it enhances the procurement process' usability and transparency by relying on cutting-edge technologies and data analytics. Moreover, thirdly, it also aids in increasing efficiencies and reducing costs.
Since its inception, GeM has proven to be transformative in streamlining and improving public procurement processes in the four years. It has enabled increased compliance through its focus on transparent and rule-based processes. Besides, GeM made the enforcement of complex policies like the public procurement (preference to make in India) (PPP-MII) and public procurement policy for micro and small enterprises (PPP-MSE), which had been challenging to implement and monitor in a manual system efficiently. The Government is committed to the procurement process and experience through GeM for sellers and government buyers to pursue its foundational pillars of inclusivity, usability, transparency, and efficiency.