Modi counts on e-market for all govt purchases

Amazon-like portal at centre of his reforms, but training staff to use it poses a challenge

NEW DELHI • India's Prime Minister Narendra Modi plans to move all government purchases, from paper clips to power plant turbines, to an Amazon-like online marketplace that could eventually be worth a fifth of the country's US$2 trillion (S$2.9 trillion) economy.

Mr Modi's government, which on Nov 8 announced a sudden decision to replace 86 per cent of India's cash in a bid to cut corruption and move to a cashless economy, has much riding on the new online market, which has already traded 390 million rupees ($8.2 million) since it began in August.

"This provides India with an opportunity for transformation," said Ms Rita Teaotia, the top bureaucrat in India's Commerce Ministry. "The transparency and competitiveness it has brought are very encouraging and so far we've seen that the government's savings are at least 10 per cent on every transaction."

The portal is expected to support trades worth 20 per cent of India's gross domestic product once all state governments, state-owned companies as well as utility, defence and railway firms come online, said Mr Vishal Singh, additional director at the national e-governance division, which set up the platform.

But with only 20 per cent of Indians able to access the Internet, the government - India's biggest employer - faces the challenge of training staff across the country to use the digital marketplace.

Departments as diverse as finance, municipal corporations, the police, hospitals and post offices, some located in villages where regular power failures make Internet access difficult, are expected to be involved.

CHANCE TO TRANSFORM

This provides India with an opportunity for transformation. The transparency and competitiveness it has brought are very encouraging and so far we've seen that the government's savings are at least 10 per cent on every transaction.

MS RITA TEAOTIA, the top bureaucrat in India's Commerce Ministry.

It is designed to leave a digital trail that will allow unprecedented openness in a nation ranked 76th on Transparency International's 167-nation corruption index. Bureaucratic delays and corruption were cited as among the biggest obstacles to business in India by the World Bank's 2014 Enterprise survey.

The e-market is at the centre of Mr Modi's key reforms: "Digital India", aimed at increasing the ease of doing business in the notoriously red tape-heavy country; "Make in India", which seeks to boost the domestic manufacturing industry; and demonetisation, which is attempting to tackle cash that is unaccounted for as well as corruption.

Mr Modi, whose Cabinet earmarked US$16.5 billion in December 2014 for a three-year digital push, needs the plan to sustain India's 7 per cent-plus growth rate.

Mr Ram Niwas Sharma, 54, and his fellow students are among the weekly batches of state employees learning to use the Government e-Market.

"It's a lot like Amazon.com," said Mr Sharma, an employee at a state-run engineering college in New Delhi. "And it's much easier compared with our current system, more transparent."

The platform is not very different from Amazon or its local rivals Flipkart or Snapdeal in look or design, allowing users to choose from products listed alongside photos and detailed specifications. It even allows them to compare prices offered on the marketplace with those on rival websites. What differs, though, is the scale and scope of change it can bring.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on December 02, 2016, with the headline 'Modi counts on e-market for all govt purchases'. Print Edition | Subscribe