Cabinet allows procurement by cooperatives through GeM portal

The move will help over 8.54 lakh registered cooperatives and their 27 crore members as they would get products at competitive rates from the GeM portal.

The government on Wednesday announced to expand the mandate of Government e-Marketplace by allowing procurement by cooperatives.

Presently, the registration of cooperatives as buyers was not covered within the existing mandate of Government e-Marketplace (GeM).

The move will help over 8.54 lakh registered cooperatives, like Amul and IFFCO, and their 27 crore members, as they would get products at competitive rates from the GeM portal.

These cooperatives will be benefited from this decision, Information and Broadcasting Minister Anurag Thakur told reporters.

As per the existing mandate, goods and services registered on the GeM portal are not available for use by private sector buyers. Suppliers (sellers) can be from across all segments - government or private.

The decision was taken by the Union Cabinet, chaired by Prime Minister Narendra Modi.

The GeM was launched on August 9, 2016, by the commerce ministry to create an open and transparent procurement platform for government buyers.

An official statement said the validated list of cooperatives to be onboarded on GeM - for the pilot as well as subsequent scale-up basis will be decided by the Ministry of Cooperation in consultation with GeM special purpose vehicle (SPV).

This will help in ensuring that the technical capacity and logistics requirements of the GeM system are taken into account while deciding the pace of onboarding of cooperatives as buyers on GeM, it added.

Explaining it further, the statement said the GeM will provide a dedicated onboarding process for cooperatives, technical infrastructure to support additional users on existing portals, as well as assistance to cooperatives for onboarding and transaction journey via available contact centres, in-field training and other support services.

The GeM will initiate suitable actions, including the creation of necessary features and functionalities on the GeM portal, up-gradation of infrastructure, strengthening of the helpdesk and training ecosystem and onboarding of cooperatives.

The cooperation ministry will issue necessary advisories to encourage the cooperative societies to make use of the platform for the procurement of goods and services, the statement said.

To protect the interests of the broader seller community on GeM and ensure timely payments, the modalities of payment systems would also be decided by GeM in consultation with the ministry.

The overall pace and mechanism of roll-out would be decided by the cooperation ministry, it said, adding the milestones and target dates will be aligned mutually between the ministry and GeM.

"Since the societies have more than 27 crore members, procurement through GeM would not only economically benefit the common man, but would also enhance the credibility of the cooperatives," it noted.

Further, it said that while the GeM SPV will continue to leverage the existing platform and organisation for supporting the proposed expanded mandate, it may need some investments in additional technology infrastructure and training and support resources.

To cover these incremental costs, GeM may charge an appropriate transaction fee from cooperatives, to be decided in mutual consultation with the Ministry of Cooperation.

Such charges will not be more than the charges that GeM levies on other government buyers.

This will be planned to ensure the self-sustainability of operations for GeM, and hence no major financial implication is expected for the government.

At present, the platform is open for procurement by all government buyers -- central and state ministries, departments, public sector enterprises, autonomous institutions and local bodies.

The annual gross merchandise value from the GeM platform has increased from Rs 16,972 crore in 2018-19 to Rs 1,06,760 crore in 2021-22. Products registered have risen to 54,73,867 in 2021-22 from 1,41,982 in 2018-19.

The cumulative seller count on the platform has jumped to over 40 lakh in 2021-22 from 86,835 in 2017-18. Buyers too have increased to 59,130 during the last fiscal from 21,254 in 2017-18.