Signalling intent: On Government e-Marketplace (The Hindu)

Mains Paper 2: Governance
Prelims level: Government e-Marketplace
Mains level: Government policies and interventions for development in various sectors and issues arising out of their design and implementation

Context:  

• The Centre’s decision to make it mandatory for vendors on the GeM procurement platform to specify the country of origin of new products is aimed at promoting India-made goods.
• Apart from the place of manufacture, the platform’s administrators have also sought details on the extent of local content and set guidelines on the percentage of localisation for enabling procurement in the case of bids of a specified value.  

Government e-Marketplace:

• Government e-Marketplace (GeM) is a very bold step of the Government with the aim to transform the way in which procurement of goods and services is done by the Government Ministries and Departments, Public Sector Undertakings and other apex autonomous bodies of the Central Government. Background.

Misplaced decision:

• However, the timing and thrust of the announcement raises several questions.
• The decision was made in the backdrop of the government’s new-found push for self-reliance in the wake of the COVID-19 pandemic and its devastating impact on the global economy.
• Also, the recent heightened border tensions with China played a role behind the decision.
• The government’s attempts to raise the share of manufacturing in the economy through the ‘Make in India’ programme have so far failed.
• It has failed to significantly boost investment in new, cutting-edge technology-driven or export-oriented industries.
• Instead, it has only taken the country back to import substitution plants making goods predominantly for domestic consumption.
• To that extent, the drive for self-reliance and greater localisation risks once again eroding Indian industry’s global competitiveness by placing a premium on ‘Indianness’ over quality or cost.

 Boycotting Chinese Goods:

• The Centre’s move with its GeM portal has amplified a gathering clamour for the identification and subsequent boycott of Chinese products including on private e-commerce platforms.
• India’s reliance on imports from China now extend̥s beyond smartphones and low-cost electronics to heavy machinery and active pharmaceutical ingredients.
• The weaponisation of trade ties is a double-edged sword and fraught with risks for the Indian economy as well.
• India’s drug makers depend on the northern neighbour for about 70% of their requirements of bulk drugs and intermediates.

 Way forward:

• For India to wean itself off these dependencies will take time.
• The fact is that enhancing manufacturing capacities with improved efficiency and reduced cost would require an overhaul of bureaucratic processes.
• Attaining genuine self-reliance is a long and capital intensive process that would require far greater investment in education, skill-building and infrastructure.

 Conclusion:

• The GeM move on country of origin is at best symbolic.
• For now, policymakers ought to tone down any trade-linked rhetoric and give diplomats and military negotiators the room to smoothe ties.

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Prelims Questions:

Q.1) With reference to the central transmission utility (CTU), consider the following statements:

1. The proposed central transmission utility will be 100% subsidiary of Power Grid Corporation of India Ltd (PGCIL).

2. It will have separate accounting, board structure and carry out its statutory functions.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer: C

Mains Questions:

Q.1) What are Government e-Marketplace (GeM) portal? What is the rationale behind government’s decision to make it mandatory for vendors to specify the country of origin on the products? Also, analysis the role of centre’s move.