GeM accounts for only 5% of govt buying; helped save Rs 10,000 cr in procurement costs, says Comm Secy

Earlier this month, GeM CEO Prashant Kumar Singh had told Financial Express Online that the marketplace is already the third biggest public procurement portal globally in terms of GMV. (Representational image: Reuters)

Ease of Doing Business for MSMEs: Public procurement portal Government e-Marketplace (GeM) currently accounts for only 5 per cent of the total government procurement worth around Rs 20 lakh crore even as it has helped save 10 per cent in cost — around Rs 10,000 crore in a cumulative procurement of Rs 1 lakh crore in five years, according to Commerce Secretary BVR Subrahmanyam. Addressing the CII’s National Public Procurement Conclave, Subrahmanyam said “If this (GeM) was a startup, probably it would be a unicorn listed for billion dollars plus in the market. The potential is huge as even if you look at the very modest government procurement figures, GeM only accounts for five per cent of what is procured in government.”

The secretary also urged GeM to look at ways to facilitate procurers from other countries to tap onto the platform for their procurement needs. His comments assumed significance as nearly half of India’s exports are from the MSME sector which the former MSME Minister Nitin Gadkari had aimed last year to increase to 60 per cent in two years. To make GeM global, Subrahmanyam also suggested change in the definition of the portal.

“Half of our exports are from MSMEs. Can we think of how GeM can facilitate procurers from the rest of the world to tap onto it? I am not saying you should compete with Flipkart or Amazon but there could be a space where you can provide a window to the world. There may be public procurement in other countries that could be requiring this. If something is procured by the Bangladesh government, or the Sri Lankan government, or African government, it would still be public procurement in some ways. So can we tweak the definition to actually expand this? GeM is on the verge of becoming a global leader in many ways,” he added.

Earlier this month, GeM CEO Prashant Kumar Singh had told Financial Express Online in an interaction that the marketplace is already the third biggest public procurement portal globally in terms of the gross merchandise value. “If you look globally in public procurement, we would be right now at number three position behind South Korea’s KONEPS and Singapore’s GeBIZ. While GeM does $5 billion GMV a year, KONEPS does $63 billion and GeBIZ does $18 billion. However, in terms of seller base, GeM has almost seven to eight times what KONEPS has, and maybe 50 times what GeBIZ has,” Singh had said.

However, Singh had said there is currently no mandate to expand the platform to private buyers in the country and also global customers. “GeM can explore similar growth like KONEPS that has expanded to six countries. We are already in talks with a lot of players who have contacted us for handholding. The day is not far when we will be invited to set up their procurement systems.”

Subrahmanyam also suggested expanding GeM to state-level procedures or preferences in order to expand its footprint and help MSMEs more. He also urged GeM to explore new areas such as work contracts in a big way as “the biggest procurement that government does is actually of work contract and then moving into new areas like contract management. Government as an entity is very poor in contract management.”