This is really historic, PM Modi just made it clear that he wont tolerate corruption in his government and will not let any future governments to indulge in corrupt practices through this amazing work! Prime Minister Narendra Modi plans to move all government purchases, from paper clips to power plant turbines, to an Amazon-like online marketplace that could eventually be worth a fifth of the country’s $2 trillion economy. Modi’s government, which on Nov. 8 announced a sudden decision to replace 86 percent of India’s cash in a bid to cut corruption and move to a cashless economy, has much riding on the new online market, which has already traded 390 million rupees ($5.7 million) since it began in August.
WHAT ARE THE KEY FEATURES
“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.” The portal is expected to support trades worth 20 percent of India’s GDP once all state governments, state-owned companies, utilities, defense and railways come online, said Vishal Singh, additional director at the National e-governance division, which set up the platform.
It is designed to leave a digital trail that will allow unprecedented openness in a nation ranked 76th on Transparency International’s 167-nation corruption index. Bureaucratic delays and corruption were cited as among the biggest obstacles to business in India by the World Bank’s 2014 Enterprise survey.
The e-market is at the center of Modi’s key reforms: ‘Digital India,’ aimed at increasing the ease of doing business in the notoriously red tape-heavy country, ‘Make in India,’ which seeks to boost the domestic manufacturing industry, and demonetization, which is attempting to tackle unaccounted cash and corruption. Modi, whose cabinet assigned $16.5 billion in Dec. 2014 for a three-year digital push, needs the plan to sustain India’s 7 percent-plus growth rate.
The Indian government currently uses a tender system to buy everything from paper and cars to defense equipment. This restricts buyers to local suppliers and allows possible price manipulations or cartelization, according to Binoy Kumar, top bureaucrat at the Directorate General of Supplies and Disposal that handles state purchases worth 100 billion rupees in a fiscal year.
The new system allows vendors across India to bid for any government purchase. India’s finance ministry changed rules to allow payments within 10 days of the purchase, a move that will free suppliers from the average wait of about two months for recoveries or harassment from corrupt officials. There wont be any corruption allegations since Govt is not restricting anyone from registering!
Everyone using the portal is required to register their personal mobile phone numbers and Aadhaar biometric cards. Aadhaar, issued by the Unique Identification Authority of India, captures personal details including fingerprints and iris scans.
The market’s user base is expected to eventually rise to about 200,000 buyers making 5,000 concurrent trades. It already has 1,259 vendors selling 2,534 products through to more than 9,108 users across 469 registered government departments, according to Radha Chauhan, chief executive officer at India’s national e-governance division. It is not yet compulsory for departments to join, she said.
“This experiment will put us on a par with nations like the U.S. and South Korea,” said Harsh Kumar, director National Institute of Financial Management, that trains Sharma and his colleagues. “If it is implemented on the scale it’s being envisaged, no procurement system in the world will be as transparent and efficient as this one.”