Direct govt purchases play a diminishing role in GeM transactions

Value of transactions has crossed over Rs 2 trillion in 2022-23

The biggest drivers for transactions on the government's procurement portal are not the direct purchases that state governments or central ministries make.

The value of transactions on Government e-Marketplace (GeM) hit Rs 2 trillion, the value of products and services doubling from 2021-22. This represents an increase of over ten times from the value of such transactions before the pandemic (chart 1).

The share of state governments in the overall procurement has been coming down. Their procurement accounted for 53 per cent of the gross merchandise value as of 2018-19. Data as of February shows that this is now down to 21.2 per cent (chart 2).



States have continued to increase purchases, but the growth in central purchases have been larger. State government procurement value rose from Rs 9,246.3 crore in 2018-19 to Rs 38,504.1 crore in the latest year as of February. Central government purchases at Rs 1.2 trillion are 15 times higher than in 2018-19.

A large portion of the increase in the central pool is on account of higher purchases by public sector companies. Central public sector enterprises had a higher share of total procurement than either state or central governments in 2022-23 (chart 3).

The National Thermal Power Corporation Limited (NTPC) accounted for a fourth of CPSE order value, according to detailed data available as of February. Other major buyers included Steel Authority of India Limited (SAIL), Indian Oil Corporation Limited (IOCL),  Bharat Heavy Electricals Limited(BHEL), Oil and Natural Gas Corporation Limited (ONGC).