GeM Services Procurement Sees Nearly 8X Surge, Value To Reach INR 1.5 Trillion This Fiscal

The procurement of services from the Government e-Market (GeM) portal is anticipated to reach INR 1.5 lakh crore during this fiscal year, primarily driven by increased acquisitions by government ministries and departments.

As per an announcement from the Ministry of Commerce, the value of services procured through GeM has witnessed a substantial rise, surging from INR 8,505 crore in FY21 to INR 65,957 crore in FY23. The increase has led to a significant boost in the overall contribution to GeM's Gross Merchandise Value (GMV), with the share rising from 23 per cent in FY 21-22 to almost 47 per cent in the ongoing fiscal year, according to the Ministry. Notable buyers of services on the platform include Central Public Sector Enterprises (CPSEs), states, and central ministries.

Growing Demand For Unique Services

The most sought-after service categories include manpower outsourcing, vehicle hiring, mine development and operations, insurance, IT, and medical services. Coal India's subsidiaries alone have placed 175 orders valued at INR 24,558 crore for handling, transport, and other mining activities. Furthermore, GeM offers a range of insurance services, including group mediclaim, assets, liability, motor, etc., with insurance companies directly registered on the platform, eliminating the need for agents.

The platform has witnessed an increasing demand for unique services such as leasing high-value medical equipment, market research, hiring chartered aircraft, examination services, and international air logistics services. To date, GeM has facilitated procurement of goods worth INR 1.10 lakh crore and services worth INR 90,000 crore. With over 63,000 government buyer organizations and more than 62 lakh sellers and service providers, GeM continues to play a crucial role in streamlining government procurement processes.

Increased Defence Procurement

In the financial year 2022-23, the Ministry of Defence emerged as the leading purchaser of goods from micro, small, and medium enterprises (MSMEs) through the Government e-Marketplace (GeM). This marked a significant increase compared to the previous fiscal year. During FY23, the ministry procured goods valued at INR 28,732.9 crore, representing a substantial 90.4 per cent increase from the INR 15,090.8 crore of goods and services it had procured in FY22.

In the current financial year, the Defence Ministry remained one of the top procurers on GeM with procurement worth INR 18,790 crore till September.

GeM allows various government entities, including departments, ministries, public sector units, state governments, and central armed police forces, to conduct transactions. It offers a diverse range of products and services, from office stationery to vehicles, and is currently the third-largest platform of its kind globally, following South Korea's KONEPS and Singapore's GeBIZ.

In conclusion, the role of central and state governments in the procurement of goods via GeM Portal has been remarkable. The widespread adoption of GeM aligns with the government's objective of achieving a 100 per cent procurement target through the GeM portal.