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PM Modi’s next big move involves moving ALL government purchases to an Amazon style marketplace

Indian, Government
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Judging by the speed at which the government is launching scheme after scheme, you would think that it wants to knock the country into shape before this very year is out. Right on the heels of demonetization, PM Modi’s government has announced an online marketplace for ALL government purchases.

Moving government purchases online is a move that had long been suggested as something that could potentially change the system and root out a significant portion of corruption and other malpractices that currently prevail in the corridors of bureaucracy. The government is now actually implementing it and is transferring all of its purchases big or small, online.

The marketplace is already operational and has traded almost 390 million rupees ($5.7 million) since its inception in August.

Speaking on the topic, Rita Teaotia, a top bureaucrat in India’s commerce ministry said,

This provides India an opportunity for transformation. The transparency and competitiveness it has brought is very encouraging and so far we’ve seen that the government’s savings are at least 10 percent on every transaction.

However, $5.7 million is really peanuts compared to the amount that the government wants to support on the marketplace. Considering that the government is adamant about moving all of its purchases online — nthe marketplace could eventually be worth as much as $400 billion — once this goal of moving all things online, is fully realized.

To put things in perspective, $400 billion is somewhere around one-fifth of India’s total GDP. This is what the market will value itself at once state governments, state-owned companies, utilities, defense and railways all jump the bandwagon.

Hindrances to overcome:

The road to moving all of the government’s purchases online is not going to be easy. Internet access in the country still stands at a paltry 20 percent. Add to it the fact that a significant portion of the country’s bureaucratic workforce is ill-trained and you have landed yourself into a virtual quagmire before even starting.

A large portion of our offices are located in places where both electricity and Internet are unreliable. As such, it is not going to be easy to create an online platform and make sure that all of the government’s offices are able to access and utilize it properly.

With that said though,it is absolutely about time to do something about India’s poor showing in its mostly bureaucratically controlled purchases. The government buys stuff by the truckloads, so even a contract for supplying pens to it is very profitable enterprise. This has led to a string of scams — many of them unproved — that involves the bureaucracy and the businessman sharing the spoils. Things like this was the reason why India was ranked 76th on Transparency International’s 167-nation corruption index.

This latest move would introduce complete transparency to a sector that sorely needed it.

This should also help curb bureaucratic delays and corruption, which were said to be the greatest deterrents to business growth in India by a world bank survey.

As far as ease of usage is concerned, the platform is quite similar to Amazon, Flipkart, Snapdeal or any of the myriad of other e-commerce portals out there. It works the same way, allowing officials to hunt for a product out of a bunch of vendors and even compare prices offered on the marketplace by different vendors. Sellers on the other hand, will be able to make bids across a wide variety of articles required by the government.

What’s more, details of the officer making the purchase will also be logged — thus removing the veil of the department . Now, if anyone makes sub-standard purchases or indulges in practices that are question-worthy — well he should better have a good explanation for it. This should remove instances of petty official corruption and introduce an unprecedented amount of transparency into the system.

Meanwhile, the government has made participation of departments voluntary while also training and educating departments in leveraging the platform to their benefit. However, it is expected that once the government feels that departments can move online without a state of chaos — it will make participation and sales through the platform compulsory.

A bibliophile and a business enthusiast.

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