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Fiscal Developments 73

Table 8: Procedure for public procurement before and after GeM

Category Before GeM After GeM
Manual process for the invitation of
Process of invitation Completely online, no requirement for
of bids bids, bid evaluation and finalization physical documentation.
of the winning bid.
Multiple agencies with multiple Single, unified, fully online public
Public procurement
policy procurement guidelines and procurement portal with clear
procedures. guidelines.
Contactless, paperless and cashless
Method of Paper-based procurement procedure
procurement with physical interaction. with time-bound payments and real-
time monitoring.
Method of Manual negotiation and fixing rates Automatic, digitization and transparent
negotiation and with the bidder and arriving at one processes.
deliberation rate applicable to all bidders.
Registration of vendors was a manual
Process of Authentication of users is done through
registration of process involving visit by officials to API integration with respective domain
vendors the vendor premises and was a time- databases.
consuming process.
Any vendor of the platform can
Eligible articipants to Limited bidding & only registered
the bid vendors could participate. participate in the bid as long the
product matches the bid.
Monitoring of Huge delay in delivery of products Real-time monitoring to ensure
product delivered or and delay in payment. on-schedule delivery of products and
service provided services.
Source: Ministry of Commerce, PIB
2.51 Anecdotal evidence suggests that prior to GeM, government procurement prices were
much higher than the prices prevailing in the market and there were constant complaints
about inefficiency and rent seeking. The use of this e-marketplace has resulted in a substantial
reduction in prices in comparison to the rates used earlier, with average prices falling by at least
15-20 per cent, up to 56 per cent .Box 5 depicts a comparison of prices on the GeM portal and
3
other online marketplaces for a selected sample of goods.

Box 5: Prices of various commodities on the GeM portal vis-a-vis
other online platforms

A comparison of prices of various commodities on the GeM portal with those of company websites
or other online platforms such as Amazon, Flipkart, etc. is given in the table below. A similar analysis
was included in Chapter 6 of Economic Survey 2020-21. For a close comparison, sample of same
commodities as selected last year, is used to the extent possible. In cases where the exact commodity
was not available, the newly available models were chosen. While in the last year’s analysis, GeM
prices were on an average 3 per cent lower when compared with other platforms, this time it is around
9.5 per cent lower for the chosen sample. 10 out of 22 commodities in the sample were cheaper on
the GeM portal as compared to other platforms.

3 GeM Booklet, Ministry of Commerce, January 2021