Is Government e-Market System Draining State Exchequer?
Stationery & Office Supplies Department be made nodal agency to make purchases through GeM
With an aim of removing the malpractices in various Government procurements and to increase transparency and efficiency (time & cost) of procurement, Government of India brought Government e- market system also known as GeM on 8th December 2017. This was made mandatory for every Government department to buy and hire services.
However, in a recently held Press Conference held at Jammu, Balvinder Singh a noted RTI activist said,
“Because of several shortcomings in the Govt e market system -GeM approximately 20 to 50 per cent commission is being involved in transaction made through GeM and as official data, there is annual turnover of Rs 2,200 crore in J&K”,
During the Press Conference, Balvinder Singh exposed many shortcomings of the GeM portal. He said that one of his RTI application filed in the Directorate of Health Services Jammu revealed how the person in charge of GeM made procurements that brought huge losses to the state exchequer that amounts to crores of rupees annually. He said that several purchases were made 30 to 300% higher than present market rates of the purchased items. The RTI activist obtained rate quotation for some items on March 12, 2022 for purchase of an Ultrasonography (USG) Machine BPL Model E-Cube 5 @ Rs 9,91,200, with three years warranty. The machines were purchased by the Directorate of Health Services Jammu (DHSJ) @ Rs 13,18,000. Around 7 USG machines were purchased for which Rs 79,06,000 (Seventy-Nine Lakh Six Thousand Rupees) were paid vide contract number 511687710463117 dated September 7, 2020. This was 30% higher than the existing market rate which means a loss of Rs 18 lakhs to the state exchequer. Balvinder revealed that the same department purchased eight numbers of Radicon-Binocular Polarizing Microscope @ Rs 58,300 including taxes on 23rd Dec 2020 vide contract No.511687769910866 Dated: 23.02.2022, amounting to Rs. 4,66,400 which was 50% higher than the market value of this product as quotations were already obtained by Mr Balvinder Singh for same product on March 11, 2022 which amounted to Rs 37816 only, including taxes. This is how the Directorate of Health Services deceived the State exchequer to the tune of Rs 1,63,872.
Stationery and Office Supplies Procurement
Stationery and Office Supplies Department (DoSOS) is one of the oldest Government Departments in J&K which was established during the Dogra Rule. It has always been the nodal agency for procurement of stationery, paper and binding material for office use by all Government/Semi-Government Offices and establishments of Jammu and Kashmir. This Department facilitated the supply of these items on uniform rates to each and every department on cashless transactions that was more or less a transparent process.
DoSOS v/s GeM ?
As per Rule 149 of General Financial Rules (GFR)-2017 issued by Ministry of Finance and section 4.17.5 of Manual for Procurement of Goods-2017, procurement through Govt e market -GeM Portal has become mandatory for all Government Departments. The Department of Stationery & Office Supplies (DoSOS) has been purchasing stationery items via e-tendering process in the past. Post creation of GeM, this Department (DoSOS) should have been transformed into a kind of Demand Aggregator which would act as a one stop solution for purchase of all stationery and other allied items from GeM Portal through e- bidding or Reverse Auctioning Mode (RAM) after aggregating demands of all the indenting Departments of J&K.
In view of Rule 149 of GFR-2017 and its subsequent amendment vide Ministry of Finance office memorandum (OM) dated: 02.04.2019, Department of Expenditure, if all the indenting Departments in J&K go for individual purchase from GeM Portal, majority of the departments shall have to go for Direct Purchase Mode (DPM) or Direct Purchase with L1 mode of GeM since hardly any department would be able to cross the ceiling of Rs.5,00,000 (five lakhs) for mandatory bidding, using online bidding or reverse auction tool provided on GeM. This will lead to higher rates than what could be obtained by this Department after going for bulk purchase from GeM via e-bidding/reverse auction on behalf of all the indenting departments under J&K Government which causes huge losses to Government exchequer.
This goes totally contrary to the Rule 149 (viii) of GFR-2017 and is also in variance to the latest amendment of Rule 149, vide Ministry of Finance OM dated 02.04.2019, Department of Expenditure section (xi). The section 2.3.3.2.1 / 2.3.3.2.2 of GeM handbook also discusses the same aspect of demand aggregation and bunching / bundling.
All this has been discussed in various communications viz. DGSS/Adm./235 dated: 07-09-2020, DGSS/Adm./280-82 dated: 28-09-2020, DGSS/Adm./19 Dated: 22-01-2021, addressed to administrative department by the Director General of Department of Stationery & Office Supplies (DoSOS). These communications also suggested providing a road map for revival of the Department on modern lines.
Pertinently, the aggregate demand of stationery and other allied items of J&K Govt amounts to approximately Rs. 1500 lacs or more as per the budget released by the Finance Department for financial year 2020-21, 2021-22.
Info Obtained Under RTI
In an RTI application addressed to the Chief Secretary, J&K dated:10-08-2021, information was received from various Departments about how they purchased their stationery. From the communications received from various Departments, it was crystal clear that the indenting departments were purchasing stationery items from cooperative stores and GeM but they are going for piecemeal purchases without demand aggregation of any kind. The RTI replies from Superintendents of District Jail Jammu vide letter No: DJJ/Acctts/1832-33 dt: 29-9-21, Central Jail Srinagar vide letter No Acctts/CJS/1632-33 dt:29-9-21), Central Jail Srinagar vide letter No Acctts/CJ/1532 dt: 15-9-21, District Jail Baramulla vide letter No Estt/234/DJBK/2021/711-12 dt: 28-921), DGP, Prisons Department vide letter No Accounts/5671-72 dt: 29-9-21 , Superintendent District Jail Kathua vide letter No DJK/Acctt/1099 dt: 29-9-21 purchased stationery worth lakhs of rupees without demand aggregation thereby losing benefits of bulk purchase incurring latent losses to Government exchequer.
After reorganisation of the erstwhile State of J&K, vide Govt. Order No: 1211-JK(GAD) of 2021 dated: 1511-2021 the Stationery & Office Supplies Department in UT of Ladakh is to be provided with more employees which is sufficient proof that this department is still functioning in UT of Ladakh, but budget allocated to Department of Stationery & Office Supplies J&K was not released during the last three financial years 2019-20, 2020-21 or 2021-22 and all of a sudden funds released were withdrawn by the Finance Department vide communication No.: FD-VII25 (11)2000 dated: 16-01-2020 stating therein that these funds have been released inadvertently, thus leaving this department in a state of suspended animation
The Department of Stationer and Office Supplies (DoSOS) had stationery depots in 12 districts across J&K. The department through its Purchase Committee and Survey Committee constituted by the Government ensured that the stationery and allied items were purchased at lowest rates and only highest quality items used to be purchased for consumption in the Government Departments besides it also fixed various Rate-contracts. But after purchases started being made through the GeM portal this Department has been made dysfunctional. The Government is planning to wind-up this department. This would be a blunder. Infact, the DoSOS should be made the nodal agency for Govt e marketing (GeM) purchases in J&K which will ensure no further loss to state exchequer.