Source: ETRetail.com, Feb 06, 2017
NEW DELHI: The government is set to make it mandatory for all its departments to procure goods and services through its Amazon-like emarketplace, which will also introduce preference for domestic players.
Mandatory use of GeM (the government e-marketplace ) could be in place in a few weeks and is part of the amendments to the General Financial Rules (GFR) being worked out by the ministry of commerce and industry, sources told TOI. The finance ministry is revising the GFR that covers all government spending, including procurement.
While there are no firm estimates of government purchases, procurement of goods and services are estimated at around 10% of spending, which will add up to around Rs 2 lakh crore. Going by current trends, the savings could be Rs 20,000 crore or so.
Since its launch in August, purchases done through GeM have added up to Rs 150 crore, with savings of 10-20% — and in some cases even up to 56%.
“The fall in prices has been more pronounced through the use of bid and reverse auction. If we can aggregate the value of purchases, we can get better deals,” said an officer, pointing out how the annual procurement of A4 paper could be done for all departments through the portal. “If the order is larger, there will be more sellers willing to participate,” the officer added. In his address to Parliament, President Pranab Mukherjee had cited GeM as the latest tool to usher in transparency and it had also found a mention in the Budget.
The preference for local players is being considered in the National Public Procurement Policy being drafted by the commerce and industry ministry as India is not a signatory to the WTO’s agreement on government procurement.
Sources said GeM will block purchase of, say, computers that do not comply with Preference for Domestically Manufactured Electronic Goods (PMA) norms. The rules prescribe PCs, laptops, tablets and other electronic products should have up to 45% domestic value addition over a five year period.