FY24 procurement target through GeM likely to set at Rs 2.5 trillion

The next growth is expected to come from works contract, services and states

The Centre is eyeing Rs 2.5 trillion worth of procurement through its government e-marketplace (GeM) portal in the ongoing financial year, a 25% jump from the Rs 2 trillion mark attained in financial year 2023.

The GeM portal was launched in 2016 to bring transparency in procurement by all central government ministries and departments. Union Commerce and Industry Minister Piyush Goyal has also appealed to vendors to join GeM in large numbers so that they too get a chance to participate in the government procurement process.

The total procurement through the government portal in the financial year 2023 stood at Rs 2,00,401 crore, compared to Rs 1,06,547 crore in FY 22 -- a jump of over 88%.

But, due to a higher base of Rs 2 trillion, the growth target for this financial year is likely to be set at 25% to Rs 2.5 trillion.

And the government is also mulling deploying artificial intelligence from the beginning of FY24. It will help the buyer in getting goods at competitive prices, and will automatically prevent any irregularity in the bidding process, a senior government official told Business Standard.

“The GeM has achieved around 100 per cent growth in FY23 against the Rs 1.06 trillion attained in FY22. The growth in coming years is expected to come from works procurement on the portal. Now that GeM has attained a certain level of maturity, the government will have more confidence in the capacity of the portal,” another senior government official said.

“We are likely to target procurement of goods and services at Rs 2.5 trillion in the ongoing financial year,” he said.

The works procurement in India accounts for around Rs 10 trillion. Works include construction of road and building, and setting up of big plants and other facilities. Currently, the GeM portal does not provide the facility for procuring these works.

The work procurement is mainly done by the Central Public Procurement Portal (CPPP), which is also used by ministries such as defence, road transport and highways, and state-run firms such as NHAI, Indian Oil Corporation and NTPC.

There are independent portals run by ministries such as railways, respective state governments and CPSEs such as Oil and Natural Gas Corporation and Hindustan Petroleum Corporation.

The official said that the growth of the portal will also come from two other areas: services as the portal aims to add more services, and from states as they are on-boarding the portal with more trust and confidence.  

The official further said that the integration with railways is complete and all the contracts of railways are visible on the GeM.

“However, fulfillment is done from the end of the railway as such procurements are sensitive in nature and GeM wants it to be on board them gradually,” the official said.