Govt spent nearly 50% less to buy Covid supplies from MSMEs before second wave via Amazon of govt buying

Out of 17.47 lakh sellers on GeM, 6.89 lakh are micro and small sellers as of April 19, 2021.

Ease of Doing Business for MSMEs: The purchase of Covid-related products by government departments, organisations, and public sector units from MSME sellers via Amazon of public procurement — Government eMarketplace (GeM) had dropped 44 per cent in terms of order value to Rs 1,135.9 crore during December 2020-February 2021 period from Rs 2,015.5 crore during September-November 2020, according to the GeM data. Importantly, the decline in spending followed the drop in daily new Covid cases in the country from as high as 96,000 as of September 17, 2020, to around 9,000 as of February 15, 2021. Daily new cases as of December 1, 2020, stood at over 36,000. However, purchases during the March-May period are likely to shoot up again amid the second Covid wave.

Comments from GeM CEO Talleen Kumar weren’t immediately available for this story.

The decline in order value was across buying channels. The amount spent via bidding and reverse auction on GeM for medical category products such as Rapid Antigen Test kits, Real-Time PCR Test kits, alcohol-based sanitizers, ICU ventilators, etc. had declined to Rs 376.4 crore during the December-February period from Rs 1,276.5 crore during September-November, as per the GeM data. Similarly, procurement through the other two modes: direct purchase and buying from sellers having the lowest price of goods (L1) also contracted slightly to Rs 233.3 crore from Rs 284.2 crore during the said period. For the purchase of auxiliary goods including dust bins, steel tables, desktop computers, plastic moulded chairs, etc., as well, the order value via bidding and reverse auction routes dropped to Rs 300 crore from Rs 353.2 crore. However, purchase via direct purchase and L1 channels for auxiliary goods jumped to Rs 226.2 crore from Rs 137.6 crore.

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Even as the order value witnessed a near 50 per cent decline during the December-February period vis-à-vis September-November quarter, the order volume or the number of orders placed on GeM was 21.6 per cent higher. A total of 1,29,903 orders were placed during December-February up from 1,06,815 orders placed during September-November. Among the top medical products purchased since March 1, 2020, were Rapid Antigen Test Kits that had 27.4 per cent share of Rs 3,666 crore order value of medical products so far while desktop computers was the top auxiliary product with a share of 59.8 per cent of Rs 2,137 crore total order value of the auxiliary category.

31,767 GeM sellers were listed under the medical category while the auxiliary category had 34,387 sellers out of the total 17.47 lakh sellers on GeM, as of April 19, 2021, which included 6.89 lakh micro and small sellers. The government had back in April last year, through a notification, urged MSMEs in manufacturing or supply of medical and related equipment to register as a supplier on GeM. The decision had come amid the reported shortage of masks and ventilators in the country after the pandemic broke out.