UPSC Relevance
- GS Paper II: E-governance, transparency, administrative reforms
- GS Paper III: Public finance, asset monetisation, sustainability
- Prelims: GeM, Forward Auctions, SDG 12.7, asset monetisation mechanisms
Why in the News?
The Government e-Marketplace (GeM) has successfully expanded its scope beyond procurement by operationalising a Forward Auction module for the disposal of government assets. Between December 2021 and November 2025, assets worth over ₹2,200 crore have been auctioned, signalling a structural shift in how the State monetises idle and obsolete public assets.
Background: The Missing Link in Public Procurement Reforms
India’s public procurement ecosystem has witnessed rapid digitisation over the past decade, with GeM emerging as a flagship platform for transparent and efficient purchasing. However, asset disposal—covering scrap, obsolete machinery, condemned vehicles, and unused properties—remained largely manual, fragmented, and prone to delays and undervaluation.
The introduction of Forward Auctions on GeM addresses this long-standing governance gap by transforming asset disposal into a rule-based, market-driven, and fully digital process, aligned with the government’s vision of “Minimum Government, Maximum Governance.”
What are Forward Auctions on GeM?
A Forward Auction is a digital bidding mechanism where:
- Government departments act as sellers
- Registered bidders compete to purchase listed assets
- The highest bidder wins, subject to a pre-declared reserve price
The entire process is paperless, cashless, and contactless, ensuring real-time competition, digital audit trails, and minimal human discretion.
Marketplace of Diverse Government Assets
GeM’s Forward Auction module has evolved into a one-stop national marketplace, pooling diverse asset categories, including:
- E-waste (obsolete IT equipment), supporting circular economy goals
- Industrial and non-industrial machinery
- Scrap and disposables, such as used lube oil and metal scrap
- Land and buildings offered on lease for residential, commercial, and institutional use
- End-of-Life Vehicles (ELVs), complementing the vehicle scrappage policy
- Subletting and leasing rights, such as dormitories, parking facilities, and toll booths
By aggregating assets on a single platform, GeM overcomes departmental silos and enables wider market participation.
Governance and Economic Significance
1. Transparency and Accountability
All auctions are conducted on a rule-based digital interface where bids are visible and outcomes are algorithm-driven. This sharply reduces opacity, discretion, and the scope for collusion, making asset disposal auditable and trustworthy.
2. Faster and More Efficient Disposal
Digitisation has eliminated paperwork, streamlined approvals, and compressed timelines, allowing departments to clear idle assets quickly, reduce holding costs, and free up physical space.
3. Fair Competition and Better Price Discovery
Open access to eligible bidders, supported by safeguards such as Earnest Money Deposit (EMD), ensures competitive neutrality. Wider participation has frequently resulted in final bids exceeding reserve prices, improving non-tax revenue realisation.
4. Environmental Sustainability
By facilitating the authorised disposal of e-waste, scrap, and obsolete materials, GeM supports SDG 12.7 on sustainable public procurement, linking fiscal efficiency with environmental responsibility.
Success Stories: Proof of Concept
- State Bank of India auctioned 100 EWS flats in Lucknow, realising ₹34.53 crore, surpassing expectations.
- National Zoological Park, New Delhi converted unusable scrap into revenue, with bids exceeding reserve prices.
- FCI/AGMIL sold screened gypsum worth ₹3.35 crore.
- 261 condemned vehicles were disposed of in Jammu via GeM.
- BRO auctioned salvaged materials, while leasing of a dormitory in Gulmarg and boating rights in Spurtar lake showcased innovative asset monetisation.
These examples demonstrate how transparency and technology convert even low-value or neglected assets into sources of public value.
Challenges and Limitations
Despite its success, certain challenges persist:
- Limited awareness and capacity in some departments
- Valuation complexities for unique or sensitive assets
- Need for stronger integration with environmental compliance mechanisms
- Digital literacy gaps among smaller bidders in remote regions
Addressing these is essential for scaling the model nationwide.
Way Forward
- Universal adoption of Forward Auctions across all ministries and PSUs
- Capacity-building and training for officials handling asset disposal
- Integration with environmental regulators for certified recycling
- Use of AI-based valuation tools to improve reserve price accuracy
- Expansion to include urban local bodies and state governments
Conclusion
GeM’s Forward Auction module has transformed an often-overlooked administrative function into a transparent, competitive, and value-maximising governance instrument. By digitalising asset disposition, it brings government departments and businesses onto a single democratic platform where rules are predetermined, bids are visible, and outcomes are fair. As adoption widens, forward auctions have the potential to institutionalise digital democracy, fiscal prudence, and sustainable governance, turning public asset disposal from a liability into a strategic opportunity.
PRELIMS PRACTICE QUESTION
Q1. With reference to the Forward Auction module of the Government e-Marketplace (GeM), consider the following statements:
- It enables Government departments to dispose of assets through a fully digital and competitive bidding process.
- It allows auctioning of assets such as e-waste, condemned vehicles, and government land on lease.
- The bidder offering the lowest price is declared the winner to ensure fiscal prudence.
- The system supports the objective of Minimum Government, Maximum Governance.
Which of the statements given above are correct?
A. 1 AND 2 ONLY
B. 1, 2 AND 4 ONLY
C. 2 AND 3 ONLY
D. 1, 2, 3 AND 4
Correct Answer: B
Q2. Consider the following features:
- PAPERLESS AND CASHLESS TRANSACTIONS
- WIDE ASSET COVERAGE INCLUDING E-WASTE AND SCRAP
- COMPETITIVE PRICE DISCOVERY THROUGH OPEN BIDDING
- CLOSED AUCTIONS WITH LIMITED BIDDER PARTICIPATION AS A RULE
Which of the above features are associated with GeM’s Forward Auction mechanism?
A. 1, 2 AND 3 ONLY
B. 1 AND 4 ONLY
C. 2 AND 4 ONLY
D. 1, 2, 3 AND 4
Correct Answer: A
MAINS PRACTICE QUESTION
Q. “Digital platforms like the Government e-Marketplace (GeM) are redefining public asset management in India.”Discuss how GeM’s Forward Auction module contributes to transparency, efficiency, and sustainability in the disposal of government assets. (250 words)