Government e-Marketplace (GeM) is set to introduce a new functionality that will enable it to impose penal interest for delayed payments. This move is aimed at ensuring timely payments to vendors who sell goods on the GeM platform. According to a senior official, in 2020, the government decided to levy a 1% penalty on government departments and agencies for delayed payments. This provision will be operational from July 2021.
This new functionality will be crucial in ensuring efficiency and transparency in the procurement process while promoting a level playing field for vendors. The system will ensure that government ministries and departments make prompt and timely payments, which will also enhance the marketability of GeM as a platform.
The imposition of penal interest is a positive step that will benefit the vendors and speed up the procurement process. Many vendors will welcome this move as they often face problems retrieving payments for the services or products they provide.
Earlier, vendors had to face the brunt of delayed payments, which often led to cash flow disruptions and negatively impacted their ability to operate efficiently. The new system will eliminate such issues and ensure a smooth and hassle-free procurement process.
In conclusion, the introduction of penal interest by GeM is a much-needed initiative to streamline the procurement process and bring efficiency to the system. The move is expected to benefit vendors and promote inclusivity in the procurement process. As a platform that has revolutionized procurement for the government, the introduction of the new functionality is yet another step forward for GeM.
