Railway Minister is pressuring Board to take illegal decision

Is it to increase the commission of private firm or otherwise?

Government of India had established Government e-Marketplace (GeM) for selling and purchasing of common use Goods and Services.

As per Rule 149 of General Financial Rules (GFR), it is mandatory for all Ministries and Departments of Central Government to purchase Common use goods and services through GeM only.

Thus, as per law, the mandate of GeM is limited to transactions of only common use goods and services.

Here, “common” means the items and services which are being purchased by almost all Central Ministries and Departments for regular use.

In market parlance, common items means the items and services, which are readily available in the market and regularly used by common people such as hardware, paints, textile, computer, light fittings, light peripherals, and hiring contracts etc.

Ministry of Raiilways purchases around 25000 items on regular basis with annual value of Rs 50,000 Crores. Out of that, only few thousands less than 1000 items are of common nature.

Remaining all items are technical and special in nature and used by Railways only for manufacturing and maintenance of their assets.

No other departments use such items and nobody even in his dream can categorise those as “common” items.

Hence, as per law established by the Government themselves, Railways is bound to purchase only those limited items through GeM, which are of common nature, which they are already doing.

Remaining items, which are special in nature and are exclusively used by the Railways only, are purchased by Railways through their well-developed and well-established end-to-end completely digitised on-line system known as Indian Railway e-procurement system (IREPS).

This is perhaps the most powerful e-platform not only in the country but also in the world that railway has developed over a decade by investing hundreds of Crores.

However, the Minister in gross violation of the established law, has ordered the Railway Board to make all purchases including all railway’s track items through GeM only.

Though, Railway Board is trying their best to resist such an illegal move by the Minister, they have now almost given up and because of heavy pressure from the Minister and matter is listed for final decision in full Board Meeting to be held tomorrow Wednesday, on 22nd july, who are now going to sign on the dotted line.

This is now only a mere formality. Because of the imposed wrath of the Railway Minister, Board has succumbed. Now, entire railway purchases will be made through GeM only.

The very important question now arises why this illegal decision is being taken?

To find out the answer of this question, one must understand the money involved in it.

Sellers, who sell their products through GeM has to necessarily pay 0.5% service charges to GeM, and half of that (0.25%) goes to a private firm, who has developed the software of GeM.

Hence, if Railway’s annual purchases of more than 50,000 Crores are made through GeM, private firm will make 125 Crores annually every year from railway alone.

If commission from other Ministries are added, it will run in hundreds of crores.

That’s the precise reason why in violation of law, the Minister is pressuring Railway Board to take illegal decisions.

The worst part is that it would make IREPS defunct, and therefore, tens of hundreds of crores of rupees invested by the Railway in last 10 years to develop their own e-platform shall go in drain.

#GeM #MR #railwayminister #piyushgoyal #railwayboard #marketing