Public procurement portal Government e-Marketplace (GeM) is working on a series of steps including a mechanism for timely payment to vendors and rating buyers and sellers to promote its growth, a senior government official said.
The Commerce Ministry launched GeM, an online platform for public procurement, in August 2016 with the objective of creating an open and transparent procurement platform for government, which runs in several lakh crore.
“We are working on several things like ensuring timely payment to vendors, helping MSMEs get working capital from banks and rating of both buyer and seller to improve efficiency,” the official said.
Currently, a buyer has to pay in 10 days to vendor, but it is not being implemented properly.
“Timely payment will help government in promoting competition among vendors and MSME growth. We are working on a system which would strictly ensure payments in a fixed timeline to the vendor if quality and other things are okay,” the official added.
GeM is also formulating a mechanism to rate both sellers and buyers. If a buyer does not pay on time, the rating will be affected and sellers would be cautious in delivering goods and services.
Similarly, if a seller does not deliver goods on time and if there are quality issues, the rating will be bad. Good ratings will help sellers in getting working capital at affordable cost from banks on sharing transaction history.
“So we are working on all these steps. Banks can see rating and risk history of buyers and accordingly lend at low cost also. Through this, we can establish credit linkage to MSMEs,” the official added.
The government is also considering to widen the ambit of GeM by permitting government contractors and private bulk buyers to use the platform for buying goods and services.
Currently, they are not allowed to procure goods and services from the GeM platform managed by the Commerce and Industry Ministry. At present, government departments, ministries, public sector units, state governments, and Central Armed Police Forces are allowed to carry out transactions through this portal.
West Bengal-cadre IAS officer Talleen Kumar was recently appointed as the new chief executive officer of GeM. According to GeM, 2,72,283 sellers and service providers have registered with the portal so far to sell 12,00,481 products and 15,982 services.
The government has made it mandatory for all the departments and ministries to source goods and services from its e-marketplace. The portal provides a wide range of products from office stationery to vehicles.
Automobiles, computers and office furniture are currently the top product categories.
Services, including transportation, logistics, waste management, web casting and analytical, among others, are listed on the portal. Public procurement worth Rs 50,000 crore is expected to take place through GeM during 2019-20, up from Rs 33,366 crore currently.