Transforming Public Procurement: GeM's Impact and Future Initiatives

Here is an exclusive interview between Shri PK Singh, CEO of GeM (Government E Maketplace), and Dr Faiz Askari, Founder of SMEStreet, key insights were shared regarding GeM's pivotal role in revolutionising public procurement in India and its plans for future initiatives. The interview also touched upon the Startup Mmahakumbh event which was supported by GeM. Here's a brief overview of the discussion:

The Startup Mahakumbh: GeM Impact

Faiz Askari: ⁠What is the role of Gem in Startup Mahakumbh?

PK Singh:  Startup Mahakumbh will be a historic event because nothing of this scale has been organised ever. Particularly in this event, we want to engage very actively. It is only when people come together, interact and see each other, is the fire of ideas is ignited. That is exactly the idea to be at Startup Mahakumbh. We will also be there. We are also a Startup and we will also be learning. We will attempt to onboard each of these Startups on our portal so that we can do possible hand-holding and act as a minor catalyst in this Startup Ecosystem.

During the event, Government e-Marketplace will showcase its comprehensive registration and onboarding process to the participating startups & women-led MSMEs, its Interactive Multilingual Learning Management - an innovative solution to help sellers navigate the platform effortlessly. It will also provide a chance for MSMEs to connect with GeM representatives on queries and additional clarifications. Shri Singh, CEO - GeM, will also address the participants in a panel discussion on “Role of startups in realizing the vision of Viksit Bharat”. Various other GeM officials will also be holding masterclasses throughout the event to indulge participating startups in meaningful discourse. 

Government e-Marketplace (GeM), India's leading public procurement platform and a key sponsor at the Startup Mahakumbh event, is all set to showcase its capabilities and initiatives to further the growth of the MSME sector and startup ecosystem in India. India’s largest startup event, Startup Mahakumbh which is scheduled for March 18-20, 2024 at Bharat Mandapam, Pragati Maidan, New Delhi, will serve as a vital platform to foster innovation, entrepreneurship, and collaboration within India's vibrant startup ecosystem. 

Government e Marketplace’s active role in organising and supporting the entire event underscores the company’s commitment to propelling the growth of startups and MSMEs by providing them with new opportunities in the public procurement domain.

Transforming Public Procurement

Faiz Askari: Can you share insights on how the public procurement industry is working? How does it benefit the MSMEs from traditional ways of procurement?  

PK Singh:  Just to throw some numbers at you, Out of the seven and a half lakh plus crore (7.5 lac + crore) of procurement that GEM has done, more than 50 per cent has gone to Micro and small businesses (MSEs). I'm not even saying medium, these are micro and small enterprises. You see the number of MSEs associated, it's over about 15 lakhs, I would say, is the number who are actively registered, who are trying to participate in our procurement process. We are very clear that you know, that just by onboarding them, our journey doesn't end. We have to do the hand-holding also. We have to educate them as well. And build-in features which remove their pain points. Any MSME in India today is constrained by, number one, access to finance, and number two, market access, and access to information. Access to information is there completely on my portal. Access to finance - we have started GeM Sahay - the pilot has been done very successfully.

Faiz Askari: What are the key pipeline initiatives from GeM for MSME in 2024?

PK Singh:  We are rolling out the new GeM Sahay 2.0 by April 1st week wherein any MSME who is doing a transaction on Gem will be eligible for a collateral-free loan based purely on the GeM order that he receives. For example, he receives an order, he straight away goes to Sahay and asks for a loan for a certain duration, and all the banks and the NBFCs who are on the other side, without any manual intervention, based on the data that we share, uh, with the lenders, that this is a good seller agent, 10 transactions successfully implemented. 

They will offer a quote. Say, I'm giving a loan for 80 days at 11 per cent interest or whatever. And then the applicant can choose from a bouquet of offers as to which one is the best fit for him. So access to finance has also been taken care of by us. Market access - now that is where we need to have a very regular interaction. We have instituted our teams associated with associations like CII and FICCI as a chapter. And the state chapters also. Wherever there's a meeting happening, we want that, you know, please invite us, we'll be there. We'll try and educate people, we'll try to onboard people. The numbers have, uh, uh, been very good for us. One more area where we thought that you know, we are about 60 odd, uh, It's not physically possible for us to code. But then we, uh, thought that we have our own rules. We tied up with the common service centres the media posts and post offices. We integrate them into our system. We train every one of them to work, you know, as we need their training. 

Today, all the CSE centres are exactly aware of how a person has been trained. Yeah. We are paying the cost of registration. We have a demo you can do. We pay you extra money for registration. That was just a capture. When, uh, almost more than a lakh such registrations are happening every month. We have to train over and over again. Once the money started flowing from us, once they developed confidence, now we are still, the people are calling vendors nearby that you come to the check, come and register, and it is pretty quick. They are even going a step ahead and say, look, you can get this from us and we will still help and they will do it. These are the last men in the queue who are constrained by digital literacy, and lack of information. So that point also has been taken care of. And I'm very sure that, uh, uh, payment is one area which has been I think that was easy, for quite some time. What would you ensure that the payments are given, uh, you know, in time, within the notified period? This is also a period of, um, uh, real interest. Very soon the functionality will be developed. The last point I want to mention here is that, uh, we have gone even to the panchayat level. Okay. Um, our collaboration with the Ministry of Panchayati Raj. today, we are almost having almost 1 lakh plus panchayats registered as (). In the next couple of months, we'll be covering all the 2. 7 lakh panchayats in the country. We need to identify that any of these panchayats want to transact. Uh, for, for, for their, uh, buying requirement, they can do so and do so through our portal. You see that, look at the larger message here. The larger message here, so on a global scale is, that in India, we have a system wherein the lowest level of administration which is 275,000 units, can log on to a procurement platform and fulfil their procurement needs. So far, only the fund flow from the government to the panchayat was visible. But how that money is being spent was not known, if is it being spent wisely, was not known. So in so far as goods and services, are concerned, they can transact the portal, and the information will be there in real time for all to see.  

Faiz Askari: Please inform us about the Startup Runway initiative of GeM. 

PK Singh: GeM provides direct online access to more than 1.4 Lakh+ Government Buyers and is a dedicated marketplace for startups to list their product and services. The platform provides new opportunities to scale up businesses with central & state governments, with a seller-friendly dashboard for monitoring orders and payments. These features, coupled with capabilities to sell products up to INR 25,000 directly to government buyers, have huge potential to help onboarded MSMEs with better market linkages and business expansion. 

StartupRunway Outlet Store was launched (https://gem.gov.in/Startup_Runway) in November 2019 to align Startups with Government buyers. The Startup Runway offers Brand and IPR protection and facilitates Startups to exclusively list their innovative products with minimal technical specifications under the 14 globally recognized Startup subsectors, namely; Advanced Manufacturing and Robotics, AgTech and New Foods, Artificial Intelligence, Big Data & Analytics, Augmented/ Virtual Reality, Blockchain, Cleantech/ Renewables, Consumer/ Home Electronics (+Wearables, Smart Devices), Cybersecurity, Education Tech (Edtech), Health and Life Sciences, Water Tech, Assistive Tech, Legal Tech and MedTech.

Exemptions for Startups under prior turnover, prior experience and earnest money deposit (EMD) are enabled, including all functionalities offered on the marketplace. Presently, 23,332 DIPP-recognized Startups are registered on GeM and have fulfilled a cumulative total of 8.99 lakh+ orders worth ₹ 23,123 Crore. 

GeM has also made a significant impact in the lives of Women Entrepreneurs. Please share your views on some flagship initiatives of GeM in this direction.

Government e Marketplace (GeM) has launched “Womaniya on GeM”, an initiative to enable women entrepreneurs and women self-help groups to sell handicrafts and handloom, accessories, jute and coir products, home décor and office furnishings, directly to various Government buyers, sans intermediaries. 

GeM has specially categorised products such as handicrafts and handloom, accessories, jute and coir products, bamboo products, organic foods, spices, home décor and office furnishings for ease-in-procurement. 

Womaniya homepage (https://gem.gov.in/womaniya) under the #Vocalforlocal GeM Outlet Stores informs procurement officers in various government ministries, departments and CPSEs about the drive to promote procurement of common-use goods and services from women entrepreneurs.

The initiative seeks to develop women entrepreneurship on the margins of society to achieve gender-inclusive economic growth and neatly aligns with Government’s initiatives for MSMEs, especially to reserve 3 per cent in government procurement from women entrepreneurs.

On GeM's Global Vision

Faiz Askari: Since GeM has become the world’s largest and most diversified case study of public procurement. Do you also plan to expand GeM to global horizons? I mean, can countries that are in the process of implementing a transparent public procurement system, can work with GeM? 

PK Singh:  That's a fantastic point. It can be a major tool for diplomacy also. So the answer is ‘yes’. We can have at least the neighbouring countries, some of the other countries which require this kind of transparent procurement, which are willing to do that, our basic message is that they do not have to reinvent the wheel. It is that we can provide a model which is proven and successful. We have been in talks with several countries, which have been facilitated through the World Bank and ADB. And everybody is very keen because so far, my understanding is that they have only been looking at a rate contract kind of mechanism. So then, in our case also in recent days, but then that is nothing, which is efficient or transparent. So when we tell them that, look, there's a marketplace model which you can adopt, they are also excited. So at some stage, given the government mandate, we would love to expand our reach beyond our borders and take the good experience that we have acquired for the countries.