The central and state governments procure goods and services worth over Rs 5 lakh crore annually, she said.
"If that is the quantum of taxpayers money being spent on procurement of goods for the government, there needs to be an open and transparent process and therefore bringing it on board a platform like this (GeM) is absolutely important," she said.
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The minister was speaking at a national consultative workshop for the government buyers and sellers on GeM here.
Of Rs 5 lakh crore, "even if we save 10 per cent because of the transparent way in which we do business, it would be a great saving for the public exchequer," Sitharaman added.
She asked the states to utilise this facility for a larger public interest.
Buying goods and services from this portal would help in reducing cost, getting more choices to buyers, she said, adding that GeM promotes ease of doing business for both buyers and sellers.
Five states and a union territory including Gujarat, Arunachal Pradesh and Telangana have inked an MoU with GeM for smart procurement of goods and services.
Through this agreement, the states would put in place a mechanism for smooth implementation of GeM framework. It would also ensure timely payment by state departments to the vendors registered on the GeM portal.
It has been made mandatory on GeM to make payment to the vendors within 10 days of receipt of goods and services.
Speaking at the workshop, Director General, Directorate General of Supplies & Disposals (DGS&D) Binoy Kumar said that currently over 20,000 sellers are registered on this portal for selling over 50,000 products.
"This portal reflects the government's commitment for transparent and accountable system of public procurement," he said, adding that states' savings would increase due to this system.
GeM was launched by the commerce ministry to bring greater transparency and efficiency in public procurement.