The Government e-Marketplace (GeM) has taken a significant step toward improving the ease of doing business by reducing transaction charges for sellers and service providers on its platform. This initiative, announced by a senior government official, is part of a broader 100-day plan aimed at enhancing business accessibility and fostering a more inclusive economy. According to Mr. Ajit B. Chavan, CEO of GeM, this move is both "bold" and essential for leveling the playing field in public procurement.

Effective from August 9, the new revenue policy eliminates transaction charges for all orders valued up to US$ 11,978 (Rs. 10 lakh). This represents a substantial increase from the previous limit of US$ 5,989 (Rs. 5 lakh). For orders that exceed this threshold but remain within US$ 1.2 million (Rs. 10 crore), a reduced transaction charge of 0.30% of the total order value will now apply, down from the previous 0.45%. Additionally, for larger orders exceeding US$ 1.2 million (Rs. 10 crore), the fee will now be a flat US$ 3,593 (Rs. 3 lakh), a significant reduction from the earlier maximum charge of US$ 86,841 (Rs. 72.5 lakh).

With this restructuring, nearly 97% of GeM transactions will now incur no transaction charges. This is a pivotal change that not only simplifies the procurement process but also aligns with the government’s commitment to lowering transaction costs and making the public procurement ecosystem more accessible. The updated fee structure is particularly beneficial for micro and small enterprises (MSEs), which often face financial constraints and operational challenges. By significantly lowering transaction charges, GeM aims to empower small businesses to participate more actively in public procurement, thus driving innovation and value in this sector.

Launched in 2016, GeM serves as a unified digital platform for the end-to-end procurement of goods and services by central ministries, state departments, public sector enterprises, and cooperatives. The platform was designed to eliminate inefficient and corrupt manual processes, facilitating a more transparent and efficient procurement process.

The latest changes underscore the government's commitment to democratizing access to the public procurement ecosystem. By easing the financial burden on small businesses, the GeM platform fosters an environment where diverse suppliers can contribute their unique offerings. This is expected to lead to increased competition, improved quality of goods and services, and better value for the taxpayer.

With nearly 97% of transactions now free from transaction fees, small businesses can focus on delivering innovative solutions without the worry of high costs hindering their participation in government procurement. This is a significant move towards enhancing business inclusivity and ensuring that the benefits of digital procurement reach all segments of the economy.

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