5 Essential Financial Rules (GFR 149) for GEM Portal Purchases
The Government e-marketplace (GeM) is a boon for government departments and PSUs (Public Sector Undertakings) in India, streamlining public procurement. But for startups and businesses eager to tap into this vast market, navigating the financial aspects can be tricky. Here, we explore the 5 essential financial rules derived from GFR 149 to ensure compliant and successful purchases on the GeM portal.
Rule 1: Understanding GFR 149 Compliance
GFR 149, a rule within the General Financial Rules (GFR) 2017, mandates government departments and PSUs to utilize the GeM registration portal for procuring common-use goods and services, subject to specific value thresholds. This rule ensures transparency, efficiency, and wider participation from sellers, including startups registered under Startup India.
Rule 2: Prior Budget Allocation and Purchase Planning
Before initiating any purchase on the GeM registration certificate, government departments, and PSUs must have a pre-approved budget allocation for the specific goods or services needed. This ensures responsible fiscal management and avoids exceeding allocated spending limits. As a seller, understanding this rule helps align your product/service offerings with pre-existing departmental needs.
Rule 3: Following Threshold-Based Procurement Procedures
GFR 149 defines two key thresholds for procurement on GeM:
Up to ₹25,000: Departments can directly purchase from any GeM-listed seller meeting their specifications and delivery timelines. However, they must certify the price's reasonableness compared to market rates.
Above ₹25,000 and Up to ₹5,00,000: Departments must procure through the "Lowest Price (L1)" bidding process. This ensures competitiveness and value for money. Sellers must be strategic with their pricing to be competitive within the L1 bidding system.
Rule 4: Transparent Payment Processes
The GEM registration process mandates transparent and secure payment processes. Typically, payments are made electronically after successful delivery and acceptance of goods or services. Understanding this helps sellers establish trust and plan their cash flow effectively.
Rule 5: Maintaining Proper Financial Records
Government departments and PSUs are required to maintain proper financial records for all GeM purchases, including invoices, delivery receipts, and payment confirmations. This is crucial for audit purposes and ensures accountability. As a seller, you should provide proper documentation to facilitate this process.
Conclusion:
By adhering to these 5 essential financial rules derived from GFR 149, both government entities and businesses like startups registered under Startup India can ensure a smooth and compliant experience on the GeM portal. Understanding these financial guidelines fosters transparency, promotes fair competition, and ultimately leads to a more efficient public procurement ecosystem in India.
By familiarizing yourself with GFR 149 and Startup India regulations, you can make informed decisions and leverage the GeM portal effectively, fostering a win-win situation for both government entities and aspiring businesses.
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