We have often heard that an old photocopier in a government office doesn’t get replaced even after its lifetime is over. So the government staffs continue to get the work done outside or they would put that burden on the customers. Because, till recently, in government offices, if anything was supposed to be purchased, then they will have to call a tender through an advertisement in the newspaper and then sellers or service providers will have to bid for it on a fixed day and finally the officer responsible for procurement will procure based on price and quality. This has been the process which would take years together to get over. Moreover, there were significant chances of nepotism, favoritism and corruption. That is why Public Procurement Bill was also brought in.
However, Modi government has found a new solution for this whole menace of public procurement through the use of digital technology. E-commerce has been a booming industry in India and we have seen it rising in this decade. According to Internet and Mobile Association of India and IMRB, India’s entire e-commerce market at the end of December 2015 was worth Rs 1. 25 lakh crore. Several marketplaces like Flipkart, Snapdeal and Amazon are in tussle between one another. Due to tough competition, they are also involved in certain unethical practices of price war which had come under the scrutiny of Ministry of Commerce. Now, the government itself has entered into this sector with its own marketplace called Government e – marketplace (GeM – gem.gov.in).
How does it work?
GeM was launched in early August and it has 3,100 products in 56 categories. It also has cab hailing service. Currently it has 1,129 registered government buyers, including 469 heads of departments, 1,247 sellers and 56 service providers. The public procurement has become easier through this website. The officer assigned for procurement for a particular office. He has to register with the website through his Aadhar number and mobile phone and email combination. All sellers in the website are also verified through Aadhar, mobile number and emails. The user can place orders up to a value of Rs. 50,000. They are also permitted to buy goods worth more than Rs. 50,000 from the lowest cost supplier. If other vendors apart from the one who has got the order want to list their products and they can become competitors to provide the goods and service at a competitive price with quality through registering the products within 2 days of placing of the order. If the delivery of the order is delayed, then users can charge penalty of 0.5% every week. After five weeks the order expires. Once goods are received, the customer has to inspect the product and issue procurement certificate or reject the product within 48 hours with valid reasons. If the consignee does not issue a receipt and acceptance certificate in 10 days, vendor’s account is credited within 5 days.
This model of public procurement brings in transparency into the whole process. The vendor need not wait for two months or more to get the bill settled by the government office. He even need not visit the government offices several times to get the bill approved by the officer. He need not give any percentage of the bill to anyone. That is how right from paper clips to power plant turbines are being procured.
According to a senior bureaucrat, the expenditure has been reduced by around 15 percent. A cost reduction of about 15% could save the government nearly Rs 20,000 crore which is equivalent to half the 2016-17 budget for the national job guarantee scheme.
The portal is expected to support trades worth 20 percent of India’s GDP once all state governments, state-owned companies, utilities, defense and railways come online. GeM has already done a business of Rs 38 crore and is catching up the leaders of e-commerce market with the addition of more and more products in exponential speed. In a way, government would provide a healthy competition to the other market places and since it has definite customers, it can break the monopoly of the other players in Indian e-commerce space.
Care to be taken:
Some government officials are apprehensive about the safety of the biometric data that they have to provide to the GeM. Earlier the officials were acting on behalf of the department. However, now they will be directly held accountable which is another deterring factor for the officers concerned.
Another major threat is due to issues of cyber security. If the website is hacked, then the details about each department’s procurement details will be available in one place which would be easily accessed and stolen.
Despite the concerns raised against the GeM, it is expected from the government that it will take care of these apprehensions as it is very much aware about these probable problems. On the whole, this initiative has eased the procurement process and has brought in transparency and accountability in to the system. This is a very good step in right direction.
You can reach the author on twitter @aksharadamle