GeM and Punjab Government MoU for Project Management Unit

An important initiative aimed at strengthening public procurement and market-based reforms in Punjab took shape when the Government of Punjab signed a Memorandum of Understanding (MoU) with the Government e-Marketplace (GeM). The agreement focused on establishing a dedicated Project Management Unit (PMU) under the GeM-Organisational Transformation Team (GOTT) model, with the objective of enabling more transparent, efficient and inclusive procurement processes for the state.

Background

GeM is a national public procurement platform launched by the Union Government to facilitate the purchase of goods and services by central and state government departments through an online marketplace. The platform emphasises three pillars: Efficiency, Transparency and Inclusiveness.The state of Punjab, recognising the potential of such a marketplace model, entered into the MoU in order to set up a Project Management Unit (PMU) that will assist the state departments in leveraging this platform to its fullest. The state became the first in India to adopt the GOTT-PMU model under GeM.

Key Provisions of the MoU

• The MoU was signed on 10 September 2019 between GeM (represented by its Additional CEO) and the Punjab Government (represented by the Director Industries & Commerce) in Chandigarh.
• Under the agreement, the PMU will be set up in Punjab as a GeM Organisational Transformation Team (GOTT) to support buyer departments in redesigning procurement processes, building competencies and enabling state agencies to use the online marketplace effectively.
• The MoU projected that through this model, the state expects to achieve a Gross Merchandise Value (GMV) of about Rs 1,700 crore in the first year of operations, and eventually over Rs 3,000 crore per annum.
• GeM will provide guidance on process redesign, onboarding of departmental users, training and change management; the state will provide human and institutional resources for the PMU and ensure its integration into state procurement workflows.
• The PMU model envisages outcome-based self-sustenance: once established, the unit is to continue functioning by support from procurement savings, enhanced adoption and efficiency gains rather than purely one-time grants.

Significance

• The MoU marks a first-mover state initiative in India under the GeM framework to institutionalise a PMU dedicated to transforming procurement in line with modern digital marketplaces.
• It signifies a shift from traditional, manual and often opaque procurement practices to a more digital, transparent and vendor-inclusive framework.
• For Punjab, the initiative opens doors for greater participation of Micro, Small & Medium Enterprises (MSMEs), Start-Ups and women vendors, as usage of the state’s procurement portal is aligned with GeM’s inclusivity thrust.
• The projected large procurement volumes under the PMU model emphasise the scale at which the state intends to operate, thereby presenting a potential model for other states to follow.

Implementation Considerations

• The success of the PMU depends upon effective coordination between state departments (buyer agencies), the GeM platform team, and the PMU operational team. Departments need to send their procurement workflows, data and stakeholders for alignment.
• Training and change management are critical: departments must adapt to using GeM, to onboarding vendors and to managing digital procurement processes rather than legacy systems.
• Monitoring of savings, procurement volumes, vendor onboarding metrics and GMV targets will be essential to evaluate performance of the PMU.
• Institutionalisation of the PMU – staff, budget, accountability, reporting lines – is key to ensure its sustainability beyond initial setup.
• The legal and procedural integration of GeM transactions into state procurement rules and manuals is necessary to ensure compliance and to address issues such as registration, tax, quality control, delivery and vendor-liability.

Challenges and Risks

• Achieving the projected GMV targets depends on large-scale adoption across diverse state-level departments, some of which may be resistant to change or lack digital readiness.
• Vendor ecosystem readiness in the state (MSMEs, Start-Ups) must match the opportunities; otherwise the marketplace may fail to deliver expected inclusivity outcomes.
• Ensuring procurement savings, while maintaining quality, timeliness and service levels, will be a balancing act.
• The PMU must guard against risks of over-dependence on a single platform, vendor monopolies, or one-size-fits-all procurement models unsuited for specialised departmental needs.
• Institutional inertia and legacy manual processes may hamper rapid transition to the new model.

Broader Implications

• If successful, the GeM-Punjab PMU model could be replicated in other states and large governmental agencies across India, contributing to a nationwide transformation of public procurement.
• It contributes to government efforts to strengthen Make in India, Digital India, and MSME empowerment, by providing an organised digital marketplace for government buys and encouraging vendor participation.
• The model underscores the role of state-centre collaboration in modernising public sector processes: a union platform (GeM) adapted via state-level institutional units (PMU) to deliver local governance reforms.

Current Status and Outlook

As of the MoU signing in September 2019, the PMU was established and the state departments began onboarding to the GeM marketplace under the guidance of the PMU. The target GMV figures provided clear milestones for the first year and subsequent years of operations. Going forward, success will depend on actual transaction data, vendor growth, savings realised and scalability. Continued monitoring, periodic reporting and institutional mechanisms for governance of the PMU will determine whether the model achieves its transformative potential.