Narendra Modi plans to move government purchases online

New Delhi: Prime Minister Narendra Modi’s ambitious plan to move all government purchases from paper clips to power plant turbines to an online marketplace called “Government e-Marketplace, or GeM”, similar to Flipkart or Amazon could eventually be worth a fifth of the country’s $2 trillion economy.

The online marketplace, GeM, was launched for buying of goods and services by central ministries and departments in August  with a view to bringing transparency in government procurement.

The portal is expected to support trades worth 20 per cent of India’s GDP once all state governments, state-owned companies, utilities, defence and railways come online, said senior government officials involved in running the marketplace.

When the portal was launched 26 goods, including computers, stationery and services were on the platform and government plans to bring in as many as it can by April 2017,

“This provides India an opportunity for transformation,” Rita Teaotia, the top bureaucrat in India’s commerce ministry told a news agency. “The transparency and competitiveness it has brought is very encouraging and so far we’ve seen that the government’s savings are at least 10 per cent on every transaction.”

It will also provide the tools of e-bidding and reverse e-auction as well as demand aggregation to facilitate the government users to achieve the best value for the money.

After comprehensive study through a consultant followed by engaging a Managed Service Provider (MSP), a full-fledged version of GeM is likely to be positioned by March, 2017. The purchases through GeM by government users have been also authorised by Ministry of Finance by adding a new Rule No. 141-A in the General Financial Rules, 2005.

With only 20 per cent Indians able to access the internet, the government — India’s biggest employer — faces the challenge of training staff across the country to use the digital marketplace. Departments as diverse as finance, municipal corporations, police, hospitals and post offices, some located in villages where regular power failures make internet access difficult, are expected to be involved.

GeM will enhance transparency, efficiency and speed in public procurement.

It is designed to leave a digital trail that will allow unprecedented openness in a nation ranked 76th on Transparency International’s 167-nation corruption index. Bureaucratic delays and corruption were cited as among the biggest obstacles to business in India by the World Bank’s 2014 Enterprise survey.

The e-market is at the centre of Mr Modi’s key reforms: ‘Digital India,’ aimed at increasing the ease of doing business in the notoriously red tape-heavy country, ‘Make in India,’ which seeks to boost the domestic manufacturing industry, and the recent demonetisation move, which is attempting to tackle black money in the form of unaccounted cash and corruption.