A chapter in the Economic Survey of India 2020-21 has held up the Government e-Marketplace, also known as GeM, as having boosted transparency in government procurements, and showed some price comparisons between GeM and e-commerce websites such as Amazon to make its argument. Arguing that complex regulations had done little to battle rent-seeking behaviour and “undue delays”, the survey says systems like GeM, which allow transparent and quick procurement decisions, are an example for regulators to emulate overall. GeM “has not only reduced the cost of procurement but has also made it easier for the honest government official to make decisions,” the Survey said.
The survey scrutinized the L1 method of procurement, where the lowest bidder is awarded the contract for public procurement. “Ex-ante regulation cannot substitute for ex-post supervision; in fact, more ex-ante regulation only serves to dilute the quality of ex-post supervision by fostering opaque discretion,” the survey said. Giving honest officials the freedom to procure from GeM, it argued, led to higher quality procurements at a competitive price (though mostly not always as competitive as just buying from Amazon and other e-commerce websites).
Discretion in regulation is unavoidable, the survey argues. But this discretion “needs to be balanced with transparency, systems of ex-ante accountability and ex-post resolution mechanisms,” it adds. “The experience with GeM portal for public procurement illustrates how transparency not only reduces purchase prices but also provides the honest decision maker with a clean process.”