In a recent interview, Pankaj Dixit, the Chief Technology Officer (CTO) of the Government E-Marketplace (GEM) shared valuable insights into how technology is reshaping government procurement processes in India. This discussion highlighted the transformative role of technology in creating a more efficient, transparent, and inclusive marketplace for government purchases.
GeM is an online platform for buyers and sellers to exchange products and services governed by the government. The Government e-marketplace (GeM) has grown rapidly, becoming an essential platform for government procurement in India. By the end of the last FY, it has surpassed ₹4 lakh crore in Gross Merchandise Value (GMV), doubling its performance from the previous year. It is largely due to a 205% increase in service procurement and more participation from small and local sellers like artisans, women-led businesses, and startups.
Democratising Access through Digital Innovation
GEM represents a transformative shift in government procurement practices, adapting to modern demands. The GEM platform has fundamentally changed the landscape of government procurement in India. "Our mission is to break down geographical barriers and create a truly national marketplace," the CTO emphasized. "Before GEM, a tender issued in Nagpur would only attract bidders from the surrounding area. Now, vendors from Mumbai or Guwahati can participate just as easily."
This shift has not only increased competition but also allowed government departments to source products and services at more competitive rates. The impact of this digital transformation is significant, with GEM now facilitating lakhs of transactions daily. According to recent data from the Ministry of Commerce and Industry, GEM has achieved a gross merchandise value (GMV) of ₹2 lakh crore in the 2022–23 fiscal year, a testament to its growing importance in the procurement ecosystem.
Ensuring Quality and Compliance
While the platform aims for inclusivity, it doesn't compromise on quality. The CTO stressed, "Quality control is non-negotiable. We conduct on-site inspections to ensure vendors meet our stringent standards. Compliance with established rules is paramount."
A recent report by the Department of Expenditure highlighted that this strict quality control has led to an estimated 10% cost savings for the government, showcasing the tangible benefits of the GEM system. This proactive approach prevents substandard products from entering the market. The CTO elaborated, "Vendors who fail to deliver quality goods or timely services face suspension from the platform, ranging from one month to two years, depending on the severity of non-compliance."
Major Sectors and High-Value Transactions
The CTO highlighted key areas where GEM has made a significant impact. "We've seen tremendous growth in manpower and vehicle hiring services," he noted. "With the government moving towards leasing rather than owning vehicles, GEM has become the go-to platform for these contracts."
In terms of high-value transactions, the CTO revealed, "Tenders for large-scale projects, particularly in mining and development operations, can reach values of up to ₹15,000 crores." This aligns with a recent announcement by the Ministry of Coal, which stated that all coal block auctions will now be conducted through the GEM portal, further underscoring its importance in facilitating major government transactions.
Innovations Streamlining Procurement
To enhance the user experience, GEM has introduced several innovative initiatives. "We've implemented push-button procurement for smaller transactions under₹50,000," the CTO explained. "For slightly larger purchases, our Ushpatan and Elma systems facilitate procurement up to ₹10 lakhs."
These innovations mirror e-commerce platforms like Amazon and Flipkart, bringing that ease of use to government procurement. The CTO added, "Our goal is to make routine purchases as simple as possible, freeing up resources for more strategic procurement decisions."
A study by the Indian Institute of Management (IIM) Ahmedabad found that these streamlined processes have reduced procurement time by up to 40%, demonstrating the tangible efficiency gains brought about by GEM's innovations.
Addressing Challenges and Future Outlook
The CTO acknowledged ongoing challenges, particularly in ensuring transaction security and managing high bid volumes. "We're constantly innovating to make GEM more secure, efficient, and user-friendly," he affirmed. "Our team is exploring cutting-edge technologies, including blockchain for enhanced security and AI for smarter bid management."
This forward-thinking approach aligns with the government's broader Digital India initiative. As per a recent statement from the Minister of Electronics and IT, GEM is set to play a crucial role in the next phase of digital governance, with plans to integrate more AI-driven features in the coming year.
Keeping Up With SMEs
Recognising the importance of SMEs (Small and Medium Enterprises), GEM has implemented supportive measures. "We've waived transaction fees for tenders up to ₹10 lakh, benefiting 97% of contracts on our platform," the CTO stated. "We've also introduced special registration processes for SMEs to encourage their participation."
These initiatives are in line with the government's 'Make in India' program. A recent report by the MSME Ministry showed that SME participation in government procurement has increased by 35% since these measures were implemented on GEM, highlighting the platform's role in fostering inclusive economic growth.
Addressing Feedback and Improving Processes
While innovation is crucial, user experience must also be prioritized. Many users have expressed frustrations regarding delays in procurement processes, highlighting a perceived sluggishness inherent in governmental procedures. In response, the organization acknowledges that no system is flawless and has established a grievance redressal mechanism to address user concerns effectively. Participants can submit complaints through a help desk, ensuring that all feedback is logged and acted upon, creating a transparent and responsive environment.
A noteworthy aspect of the tendering process is its structured timeline. Once a tender is published, participants have a designated 15 days to respond, with decisions made promptly afterwards. However, dissatisfaction often arises among the unsuccessful bidders. The organization is committed to addressing this by maintaining open communication channels and encouraging constructive feedback.
A Tech-Driven Future for Procurement
With the advent of generative AI, procurement processes are undergoing significant transformation. The introduction of an AI-based chatbot (Ask GeM AI) enhances user interaction, allowing for a conversational interface that can respond to queries about the procurement system effectively. Unlike older models constrained by pre-defined menus, this new AI-driven solution understands context and can provide tailored responses, making it easier for users to navigate complex queries. By leveraging digital platforms, AI, and data analytics, GEM is creating a more accessible, efficient, and transparent marketplace for government purchases.
"We're not just digitising procurement; we're reimagining it," the CTO concluded. “GEM is paving the way for a more transparent, efficient, and inclusive public procurement system in India.”
As GEM continues to evolve, it serves as a model for other countries looking to modernise their procurement processes. The platform's success story was recently highlighted at a UN conference on digital governance, showcasing India's leadership in leveraging technology for public sector reform.
