Facilitating MSMEs & Govt's Buyer Seller Relationship: GeM

Prime Minister Narendra Modi has made certain bold decisions which actually have made major changes in the way business was getting done in India. The formation of Government E-Marketplace (GeM) is one such great examples. The formation of GeM is getting discussed immensely from the perspective of MSMEs.

Within few months of inception, GeM resolved two major challenges of the MSME and Government connect. Firstly, GeM has worked on resolving the problem of payment delay for the sellers and secondly, it has given immense outreach to both buyers and sellers.  Mr Faiz Askari, Editor of SMEStreet, in an exclusive interview with Mrs Radha Chauhan, CEO of GeM explored how lucrative this vast opportunity is for Indian MSMEs.

Here are edited excerpts of the interview:

Faiz Askari | According to you, what is the biggest value that GeM has bought to the country?
Radha Chauhan | While looking at India and Indian business community to be precise we had witnessed many issues that they were facing with regards to selling their products or services to bigger buyers such as Government institutions and agencies. This was a major issue for smaller companies which falls under the category of MSMEs as it became difficult for them to take up the opportunity of selling to the Government.

Now, GeM came to existence with an aim to streamline this whole ecosystem of doing business with the Government. The biggest beneficiaries of GeM are the MSMEs who got a chance to sell to the govt agencies and departments. When we extended this opportunity of selling to the Government at the MSME level we actually designed a framework which could be attractive to the MSMEs. For example, through GeM, MSMEs/MSEs can directly approach the concerned departments and place their profiles. So these MSMEs can directly get highlighted before the potential buyers of government departments and PSUs. Secondly, as per the guidelines, GeM also ensures payment guidelines and payment terms for the buyers. This clause gave a lot of MSMEs a big relief from the problem of payment delays.

Faiz Askari |What kind of growth are you witnessing in the GeM platform?
Radha Chauhan |Acceptance from the MSMEs/MSEs is immense. Government departments and state governments have all started Using GeM. We have facilitated business transactions worth over Rs 12,000 Crore have been conducted in the last close to two years.

In two years of its operations, GeM has recorded till date more than 8 lakh transactions worth over Rs.12,239 Crore.

Faiz Askari |From the perspective of buyers and sellers at GeM, how is the demography look at present?
Radha Chauhan | The platform has nearly 27.9 thousand buyer organisations registered and about 1.43 lakh sellers and service providers offering more than 4.86 lakh products and services for online purchase. GeM contributes to approximately 20-25% average overall savings to the Government.

Faiz Askari | What is your vision and strategy to increase this footprint?
Radha Chauhan | Well, we are making regular and continues efforts in this direction. We are providing training to both sides of the GEM. For example, we invite government agencies who are potential buyers to use the GeM platform at the maximum level. We are inviting sellers who could come from any remote place, from any section of the society to understand and get trained on GeM. Creating mentors for this objective is also getting discussed. These mentors can educate, motivate and explain the benefits of GeM. However, Government had launched a six week long National Mission on GeM from September 6 to October 17 in order to increase awareness. This campaign gave us great results.