The Union Cabinet's move to expand the mandate of Government e-Marketplace (GeM) to allow procurement by cooperatives as buyers will enable such societies to access over 45 lakh vendors on a single platform.
The Ministry of Cooperation, which is led by Amit Shah, is encouraging multi-state cooperative societies and cooperative societies registered under State Cooperative Acts to join the GeM platform for the benefit of their members.
On GeM, there are around 54 lakh products listed across 9,702 product categories and 279 service categories.
For cooperatives like Amul and IFFCO, purchases through GeM will provide benefits such as competitive prices. "Following the standard procedures on GeM would lead to saving of time and reduction in the administrative burden. It would enhance the credibility of the cooperatives as complaints of mismanagement of funds will get reduced," the ministry says.
Currently, there are about 8.54 lakh cooperatives in India with about 29 crore membership. These cooperatives make huge purchases of goods and services from the open market to support their operations.
Online marketplace GeM was set up by the government in 2016 for purchase of day-to day-use goods. The General Financial Rules 2017 mandates all ministries and departments to procure goods and services available on GeM from GeM.
Following this, a Special Purpose Vehicle (SPV) by the name of Government e-Marketplace (GeM SPV) was set up as the National Public Procurement Portal on May 17, 2017.
At present, the platform is open for procurement by all government buyers: central and state ministries, departments, public sector enterprises, autonomous institutions, local bodies, etc. GeM is not available for use by private sector buyers. Suppliers (sellers) can be from across all segments: government or private.
The validated list of cooperatives to be onboarded on GeM - for pilot as well as subsequent scale up - will be decided by the Ministry of Cooperation in consultation with GeM SPV. This will ensure that technical capacity and logistics requirement of the GeM system are taken into account while deciding the pace of on boarding of cooperatives as buyers on GeM.
GeM authorities will provide a dedicated on-boarding process for cooperatives, technical infrastructure and support for on-boarding and transactions, via available contact centres, in-field training, and other support services, the government says.
To protect interests of the broader seller community on GeM and ensure timely payments, the modalities of payment systems shall be decided by GeM in consultation with the Ministry of Cooperation.
While the GeM SPV will continue to leverage the existing platform, it may need some investments in technology infrastructure, and additional training and support resources. To cover for these incremental costs, GeM may charge an appropriate transaction fee from cooperatives, to be decided in mutual consultation with the Ministry of Cooperation. "Such charges shall not be more than the charges which GeM would charge to other Government buyers. This will be planned to ensure self-sustainability of operations for GeM, and hence no major financial implication is expected for government," the ministry says.
The Gross Merchandise Value (GMV) of procurement using GeM was more than ₹1 lakh crore in the financial year 2021-22, leading to an estimated savings of around ₹10,000 crore, the ministry says. The portal has delivered 178% year-on-year GMV growth in FY22.
