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Business News/ News / India/  Cabinet allows procurement by cooperatives via GeM portal
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Cabinet allows procurement by cooperatives via GeM portal

Over 8.54 lakh registered cooperatives in the country would now be eligible for buying products and services on the platform

Minister of information and broadcasting Anurag Thakur  (ANI)Premium
Minister of information and broadcasting Anurag Thakur  (ANI)

New Delhi: The Union Cabinet on Wednesday approved a proposal to expand the mandate of Government e Marketplace - Special Purpose Vehicle (GeM - SPV) to allow procurement by cooperatives as buyers on the platform.

So far, the platform was open for procurement by all government buyers, central and state ministries, departments, public sector enterprises, autonomous institutions, local bodies, among others. As per the existing mandate, GeM is not available for use by private sector buyers, although suppliers or sellers can be from across all segments, government and private.

Over 8.54 lakh registered cooperatives in the country would now be eligible for buying products and services on the platform, said union minister for information and broadcasting, Anurag Thakur during a press briefing. The minister further said that the decision would help in bringing transparency and allowing cooperatives to get competitive prices for products.

The move would benefit the 27 crore members associated with the cooperatives, according to the government.

“Since the societies have more than 27 Crore members, procurement through GeM would not only economically benefit the common man, but it would also enhance the credibility of the cooperatives," said an official statement.

The GeM was launched on 9 August, 2016 by the union ministry of commerce and industry in a bid to create an open and transparent procurement platform for government buyers. The GeM SPV was set up as the National Public Procurement Portal in May 2017.

The statement said that the validated list of cooperatives to be onboarded on GeM, for pilot and subsequent scale up, will be decided by the ministry of cooperation in consultation with GeM SPV.

“This will ensure that technical capacity and logistics requirement of the GeM system are taken into account while deciding the pace of on boarding of cooperative as buyers on GeM," it said.

GeM will provide a dedicated onboarding process for cooperatives, provide the technical infrastructure to support additional users on existing portal, as well as provide assistance to cooperatives for onboarding and transaction journeys, through available contact centers, in-field training and other support services.

The ministry of cooperation would issue necessary advisories to encourage the cooperative societies to make use of the GeM platform for procurement of goods and services in order to benefit from increased transparency, efficiency and competitive prices.

To protect 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.

For effective implementation of the decision, GeM will initiate suitable actions, which would inter alia include creation of necessary features and functionalities on GeM portal, upgrading infrastructure, strengthening of the helpdesk and training ecosystem, and onboarding of cooperatives. The ministry of cooperation would decide the overall pace and mechanism of the roll-out. The milestones and target dates will be aligned between ministry of cooperation and GeM, which comes under the union ministry of commerce and industry.

According to the government, the expansion may require investments in additional technology infrastructure, additional 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 shall not be more than the charges which GeM would charge to other government buyers. This will be planned to ensure self-sustainability of operations for GeM, and hence no major financial implication is expected for government," it said.

The gross merchandise value (GMV) of GeM has grown with CAGR of over 84.5% from FY19 to FY22. The portal has delivered 178% growth in GMV in FY22 and has crossed 1 trillion in FY22, which is higher than the cumulative GMV till FY21 since its inception, according to data from the government.

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Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Updated: 01 Jun 2022, 06:05 PM IST
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