Cabinet authorizes purchases by cooperatives through the government’s electronic market portal

New Delhi: The Union cabinet on Wednesday gave its approval to a proposal to broaden the mandate of Government e-Marketplace (GeM) by allowing purchases by cooperatives. Currently, the registration of cooperatives as buyers was not covered by the current GeM mandate.

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

Information and Broadcasting Minister Anurag Thakur said on Wednesday that these cooperatives will benefit from the decision.

Under the existing mandate, goods and services registered on the GeM portal are not available for use by private sector buyers. Suppliers (vendors) can come from 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 Department of Commerce to create an open and transparent procurement platform for government buyers.

At present, the platform is open to all public 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 obtain competitive prices through an open and transparent process.

The validated list of cooperatives to be integrated on GeM – for the pilot as well as for subsequent scaling up – will be decided by the Ministry of Cooperation in consultation with the GeM ad hoc vehicle (SPV).

This will ensure that the technical capacity and logistical requirements of the GeM system are considered while deciding the pace of onboarding cooperatives as buyers on GeM.

GeM will provide a dedicated co-op onboarding process, technical infrastructure to support additional users on existing portals, as well as onboarding and transaction journey support to co-ops through available contact centers, field training and other support services.

The Ministry of Cooperation will publish the necessary notices to encourage cooperative societies to use the GeM platform for the purchase of goods and services in order to benefit from increased transparency, efficiency and competitive prices.

In order to protect the interests of the broader community of sellers on GeM and to ensure timely payments, the terms of the payment systems will be decided by GeM in consultation with the Ministry of Cooperation.

GeM will initiate appropriate actions, including creating the necessary features and functionality on the GeM portal, upgrading the infrastructure, strengthening the support and training ecosystem, and integrating cooperatives.

The overall pace and mechanism of deployment would be decided by the Ministry of Cooperation. Milestones and target dates will be mutually aligned between the ministry and GeM. The ministry wanted cooperative societies to be allowed to source goods and services from GeM, as it is already sufficiently developed as a one-stop portal to facilitate online purchases.

Moreover, since the societies have more than 27 million members, sourcing through GeM would not only benefit the common man economically, but also enhance the credibility of the cooperatives.

Although the GeM SPV will continue to leverage the existing platform and organization to support the proposed expanded mandate, it may require investment in additional technology infrastructure and training and support resources.

To cover these additional costs, GeM may charge cooperatives appropriate transaction fees, to be decided in consultation with the Ministry of Cooperation.

These fees will not be greater than the fees GeM would charge other government buyers.

This will be planned to ensure self-sufficiency of GeM operations, and therefore no major financial implications are expected for the government.

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