Exclusive: GeM to integrate with panchayats for latter’s online procurement of goods from MSMEs

Ease of Doing Business for MSMEs: MSEs currently have a share of 56.50 per cent in GeM’s overall transaction value of Rs 1.44 lakh crore.

e commerce
The portal was launched in August 2016 to make the public procurement process transparent and easy in the country for buyers and sellers.(Representational image)

Ease of Doing Business for MSMEs: The Modi government’s public procurement portal Government eMarketplace (GeM) is now in the process of looking at integrating with panchayats in the country to fulfill the latter’s local procurement needs as part of its expansion, according to a top executive at the marketplace. GeM currently has nearly 56,000 buyers including government organisations, departments, and public sector units fulfilling their procurement needs from close to a whopping 29 lakh sellers including 7.2 lakh micro and small sellers selling on the platform.

“We are integrating with panchayats for their procurement that currently happens directly at a smaller scale offline. We would be having complete visibility over their product-wise needs and categories along with payments made electronically from every corner of the country. We can add a filter for their needs specifically and can onboard their government vendors in terms of handholding them and enabling them with digital knowledge for online procurement. It will significantly add to the growth of the marketplace,” Prashant Kumar Singh, Chief Executive Officer, GeM told Financial Express Online.

There are reportedly more than 2.5 lakh gram panchayats currently in the country. Earlier this year at an event, Singh had said that Commerce Minister Piyush Goyal had suggested encouraging panchayats as well to procure goods from the GeM portal. In May last year, former Rural Development and Panchayati Raj Minister Narendra Singh Tomar had launched a collection of daily utility products made by rural self-help groups on the portal.

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Singh said GeM’s gross merchandise value (GMV) during the first half of FY22 has already crossed the entire FY21 GMV and is well on its path to achieve Rs 1 lakh crore GMV target this financial year. 

“In H1 FY22 we surpassed the entire FY21 GMV of Rs 38,000-crore. We sold goods worth Rs 40,000 crore in H1 itself. In Q3 last FY, the GMV stood at Rs 8,000-9,000 crore and this Q3 we can easily target at least Rs 30,000 crore and can go up to Rs 45,000 crore in Q4 this year. We earlier thought that integration of Indian Railways’ procurement with GeM would take us to the target but I think we can achieve that without that as well,” said Singh. 

Commerce Minister Piyush Goyal in June this year in a performance review meeting of GeM had said that bidding by Railways’ buyers through GeM is likely to begin by August end and that the integration will “usher in a lot of savings for the public exchequer.” The minister had noted that the integration may see around Rs 50,000 crore of annual procurement by Railways done online. However, the integration is expected to take some time.

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“Looking at a very modest run rate of maybe 1.5 times of H1 GMV, which can grow up to 3X times, our Rs 1 lakh crore per annum target is very much achievable. We have kept Rs 2 lakh crore target next year,” Singh added. 

MSEs currently have a share of 56.50 per cent in GeM’s overall transaction value of Rs 1.44 lakh crore, according to the data from the portal. So far, 77.47 lakh orders have been processed through GeM. The portal was launched in August 2016 to make the public procurement process transparent and easy in the country for buyers and sellers. Among all MSE sellers, artisans are also becoming a key component in the seller base on the portal. “There are also a substantial group of artisans, weavers, and scheduled caste and scheduled tribe entrepreneurs that are coming up in a big way. Our main focus remains on how to increase penetration and handholding for MSE sellers,” Singh said.

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