In August 2016, India launched the Government e-Marketplace (GeM), a centralised portal to overhaul the way central and state government entities bought goods and services. Five years and Rs 1,45,500 crore ($19 billion) worth of transactions later, the platform is set to take things to the next level.
The Ken has learnt that the Ministry of Commerce and Industry, which owns and operates GeM, has sought approval, via a cabinet note, to add infrastructure works like road and bridge construction to the platform. By adding this, GeM takes a huge leap forward in its mission to become the gateway for all government procurement.
GeM has already hired consultants to prepare a detailed project report (DPR) for the inclusion of infrastructure works. It has already carried out a proof of concept to manage work project tendering. If and when the government gives it the green light, this will be a massive expansion of the scope of GeM. Goods and services account for only 30-40% of the government’s overall procurement. Infrastructure works accounts for the rest.
It’s little wonder, then, that GeM expects to almost triple its gross merchandise value gross merchandise value Gross Merchandise Value The total “throughput” of sales a platform manages during a given period, like a year (GMV) to Rs 1,00,000 crore ($13 billion) in the year ending March 2022. Another boost in this direction comes from an ongoing integration with the railways department, which has been in the works for more than a year. Already, the railways uses GeM for the purchase of stationery, computing devices, etc. However, the rest of its procurement is done through the Indian Railways Procurement System, the department’s own procurement marketplace.
Once the integration is successful between the two systems, the railways will use GeM to also procure complex machinery for the department. This integration could add a whopping Rs 70,000 crore Rs 70,000 crore Financial Express Piyush Goyal: Rs 50k cr worth annual procurement from MSMEs on anvil post GeM’s integration with Railways Read more ($9.3 billion) to GeM’s annual GMV.
The government wants to bring all kinds of procurement under one umbrella to benefit from the cost savings of demand aggregation. It also helps streamline the procurement process, providing composite and comparable data in one place.
But for GeM to become India’s only unified procurement system, it must provide seamless integration between ministries and government bodies across goods, services, and infrastructure works. Integration of complex, unique systems, however, isn’t a cakewalk. The National Informatics Centre National Informatics Centre National Informatics Centre Government's software and system integration unit (NIC), for instance, maintains more than 40 variations of e-tendering applications, even as it runs the nine-year-old Central Public Procurement Portal (CPPP).