Guest article by Mr.Praveen Kutty, Head – Retail and SME Banking, DCB Bank Ltd.
As India moves towards accepting social distancing as a new norm, the biggest challenge for businesses is resuming activities. Technology would act as a key bridge for organisations, big or small, to move ahead. One such impactful initiative is Government E-Marketplace (GeM) launched under the ‘Digital India’ drive.
GeM aims to transform the way procurement of goods and services is done by the government ministries and departments, public sector undertakings and other apex autonomous bodies of the Central government. The platform epitomises the market at large: multiple suppliers/buyers, diverse products with dynamic competition. It allows the government to centralise its account management, compliance procedures, and spend management.
The GeM platform provides the following four key benefits:
First, with no entry barriers, bonafide suppliers of goods who wish to do business with the government can register on the portal and see the listings on a real-time basis.
Second, technology plays a key role in maintaining transparency and offers end-to-end security. The portal supports keen businesses right from registration to final payment, making the process seamless. A query resolution and redressal system is set up to ensure fair amount of transparency and speedy query management. In fact, direct purchase can be done in a matter of minutes as the entire process is online. It is a secured platform and all the documents on GeM are e-signed at various stages both by the buyers and sellers. With the generation of e-invoice, the seller can immediately raise the needed finance through bill discounting.
Third, with tools such as e-bidding, reverse e-auction and demand aggregation, the government users achieve the best value for their money, thus maintaining the quality of bids and order fulfilment. As the government body places a procurement request, they are mandated to transfer the minimum bid amount value to a Government Pool Account (GPA) at a partner bank such as DCB Bank. Hence, this resolves the fear of payment intent.
Fourth, with hygiene checks at various stages such as requirement, bids and procurement process etc., it ensures that the supply meets specific standards and norms. It also enables buyers to have a huge variety of products from which to pick and choose along with the ease of order process across multiple consignee locations.
GeM has signed MoUs with a few select banks to facilitate transactions between the buyer and various sellers on the portal. It also works as a mediator for flow of money into the movement of goods or the fulfillment of services. Currently, many industry peers have welcomed this move, which in the long run will result in opening the sphere of public procurement to a vast majority of self-employed in India.