Procurement by CPSEs via GeM grew by 74% to Rs 42,510 crore in Apr-Jul

CPSEs account for around 53% of overall transactions on GeM

The procurement of goods and services by central public sector enterprises (CPSEs) through Government e-Marketplace (GeM) grew 74 per cent to Rs 42,510 crore during the first four months of 2023-24 over the corresponding period in the previous year.

The finance ministry has told them to ensure 100 per cent procurement through the portal.

Such procurement increased from Rs 7,027 crore in 2020-21 to Rs 45,928 crore in 2021-22. It further went up to about Rs 1.06 trillion during 2022-23.

“We are holding continuous engagement and workshops with CPSEs to help them adhere to the guidelines by facilitating their procurement process on the portal, which is expected to push it to Rs 1.5 trillion in FY24,” a senior finance ministry official told Business Standard.

 

GeM is an online platform for public procurement in India, launched in 2016 by the Ministry of Commerce and Industry, to create an inclusive, efficient, and transparent marketplace.

“To ensure effective compliance with the guidelines of the finance ministry, chief executive officers/heads of the CPSEs will be required to certify to the secretaries of the ministry or department concerned that only those goods and services which are not available on the portal have been procured outside GeM,” the official added.

National Thermal Power Corporation, Steel Authority of India, Indian Oil Corporation, Bharat Heavy Electricals, and Oil and Natural Gas Corporation are some of the CPSEs that are leading the procurement drive.  

In February, the finance ministry also asked CPSEs to arrive at their procurement potential for FY24 and upload that on a dedicated dashboard created by GeM.

The GeM portal gross merchandise value (GMV) stood at around Rs 80,000 crore at the end of July. Of that, CPSEs accounted for around 53 per cent, followed by central ministries at 30 per cent, and states at 17 per cent. 

In 2022-23, total procurement on the portal stood at around Rs 2 trillion. In 2021-22, it was Rs 1.06 trillion.

Procurement through the GeM portal is a criterion in memoranda of understanding of CPSEs and it affects their performance evaluation ratings.  

In June, Union Minister of Commerce and Industry Piyush Goyal expressed confidence that GeM’s procurement for FY24 would exceed Rs 3 trillion. 

“Saving taxpayers’ money through increased use of GeM results in better utilisation for public welfare projects. Data analytics will be offered in the new system to help buyers and sellers in making decisions related to procurement,” he added.

In a workshop on procurement by CPSEs through GeM organised in May, Atul Sobti, director general, Standing Conference of Public Enterprises, said procurement was one of the most important aspects of a business.