Union Cabinet allows procurement by cooperatives through GeM portal

The move will help over 8.54 lakh registered cooperatives and their 27 crore members

The move will help over 8.54 lakh registered cooperatives and their 27 crore members

The Union Cabinet on Wednesday approved a proposal to expand the mandate of Government e-Marketplace (GeM) by allowing procurement by cooperatives.

Presently, the registration of cooperatives as buyers was not covered within the existing mandate of GeM.

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.

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

As per the existing mandate, goods and services registered at 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 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. 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.

Allowing cooperative societies to register on GeM as buyers would help cooperatives in getting competitive prices through an open and transparent process.

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

This will ensure 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.

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 Ministry of Cooperation will issue necessary advisories to encourage the cooperative societies to make use of the GeM platform for the procurement of goods and services to benefit from increased transparency, efficiency and competitive prices.

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

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 overall pace and mechanism of roll-out would be decided by the Ministry of Cooperation.

The milestones and target dates will be aligned mutually between the Ministry and GeM.

The Ministry wanted the cooperative societies to be allowed to procure goods and services from GeM as it is already adequately developed as a one-stop portal to facilitate online procurement.

Moreover, 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.

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, which GeM would charge to 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.

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