Government e-Marketplace and SIDBI partner to boost MSME E-commerce Sales || Will this Step Revive Our Economy?

The government portal for public procurement, Government e-Marketplace (GeM) has signed a Memorandum of Understanding (MoU) with Small Industries Development Bank of India (SIDBI). The Ministry of Commerce has taken this step to promote MSMEs, women entrepreneurs, and self-help groups. The two will be taking drastic steps to ensure that sellers receive timely payments and working capital availability through bill discounting is enhanced.
According to GEM CEO Talleen Kumar, MSMEs, start-ups, and artisans will now be able to sell to government on an open, transparent and technology-driven platform. He added that within a guaranteed time frame, GeM wants to empower these sellers through the payments. Mohammad Mustafa, SIDBI Chairman and MD, said that the Memorandum of Understanding (MoU) would strengthen capacity building through GeM-specific training programs of personnel from partner agencies.
This article is a must-read to develop an understanding of how MoU aims to enable promotion of special initiatives of GeM and whether it will be able to.

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Features of the MoU

The Government e Marketplace (GeM) portal run by the Department of Commerce has entered into this pact to make it easier for women entrepreneurs, self-help groups, micro, small and medium enterprises (MSMEs), and various loan beneficiaries under special schemes of the government such as MUDRA and Stand-up India, to sell their products on the platform. According to the official release of the MoU, it will enable promotion of special initiatives of GeM like ‘Womaniya’ and ‘Start-up Runway’.

The release also states that steps will be taken by GeM and SDBI to ensure payments within a guaranteed time-frame to sellers, enhance working capital availability through bill discounting and check NPAs through control of end use. There will be provision of end-to-end solution online by The GeM platform for procurement of commonly used goods and services for all Central Government Departments and State Governments, Public Sector Units and affiliated bodies.

Partnerships with financial institutions like SIDBI, according to GeM CEO Talleen Kumar, are essential to expand the online procurement platform’s outreach. Now, wares can be sold by MSMEs, start-ups and artisans on an open, transparent and technology-driven platform. Such sellers will be empowered through payments within a guaranteed time frame. This will be possible by auto-debiting the GeM Pool Account as well as provision of working capital by giving the choice of bill discounting. They will do so with an approach where the cost of working capital will be linked to the performance and rating of the seller. The statement also mentions provision of better visibility to creditors on end use of working capital loans. The capacity building will also be strengthened by the MoU with the help of networking, workshops, marketing events, awards and recognition of MSMEs including women entrepreneurs and self-help groups that will add to GeM-specific training programs of personnel from partner agencies.

About Government e-Marketplace

• GeM was launched to enable transformation of the procurement process of goods and services across the departments/ ministries/PSUs, autonomous bodies etc.
• It enables procurement with minimal human interface as the portal is completely paperless, cashless and technology- driven e-marketplace.
• With various Government Departments / Organizations / PSUs, online procurement of common use Goods & Services and other requirements is facilitated by the GeM.
• The tools for reverse e-auction demand aggregation and e-bidding are provided by the GeM to facilitate the government users so that they achieve the best value for their money.
• Authorized by General Financial Rules, the procurement on GeM was possible after necessary changes made in government rules; 24 States and UTs have signed a formal MoU with GeM to formalize this arrangement.
• The government bodies, before the GeM, used to procure goods and services based on fixed-rate contracts and tenders. This occurred through the director-general for supplies and disposal (DGS&D).

In Conclusion

This MoU is yet another step towards its growing partnership with financial institutions to enable growth of MSMEs and Start-ups in the country. We already know that the GeM has used technology to remove entry barriers for bonafide sellers. It has also created a vibrant e-marketplace with a wide range of goods and services and continues to enhance transparency, efficiency and speed in public procurement. With this MoU, direct purchase and payment will be allowed in a matter of minutes. The entire process will be integrated end-to-end and online tools will be available for assessing price reasonability. Since the platform is so secure and safe, payments within a guaranteed time-frame to sellers, enhanced working capital availability through bill discounting and check NPAs through control of end use will be certainly ensured. GeM is being hailed for its efforts to align SHGs, women entrepreneurs, artisans, NGOs, Start-ups and other sectors with public procurement and strengthen the existing MSME ecosystem. We can hope that this move will contribute tremendously to the growth of MSMEs and Start-ups.

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Hi. My name is Apoorva Vardhan. I am an undergraduate student of economics at the University of Delhi. I am very interested in writing as well as debating. I am also very passionate about numbers and how markets work. As an economics major, I plan to pursue an advanced degree and become an economic consultant to conduct research and build strategies to solve economic issues and to interpret markets. Lastly, I am a firm believer of personal accountability as well as commitment and I enjoy creating and managing original compelling work