he Government e-Market (GeM) platform has achieved a significant milestone in the first quarter of the 2024-25 fiscal year, with procurement activities exceeding US$ 14.85 billion (Rs. 1.24 trillion). This marks an impressive 136% increase compared to the previous year's procurement of US$ 6.31 billion (Rs. 52,670 crore). GeM CEO Mr. Prashant Kumar Singh has projected that, at its current growth rate, GeM is on track to become the world's largest procurement platform by the end of the fiscal year, surpassing established competitors like South Korea's KONEPS and Singapore's GeBIZ.

Key Drivers of Growth

The robust performance of the GeM platform can be attributed to the active participation of central ministries and Central Public Sector Enterprises (CPSEs), which collectively surpassed US$ 11.97 billion (Rs. 1 trillion) in procurement. Leading the charge were ministries such as coal, defence, and petroleum and gas, highlighting the platform’s integral role in supporting critical sectors.

Dominance of the Services Sector

During this quarter, the services sector emerged as the dominant player on the GeM platform, with transaction volumes exceeding US$ 9.64 billion (Rs. 80,500 crore). This significant contribution underscores the growing reliance on the GeM platform for sourcing essential services, facilitating smoother and more efficient procurement processes for the government.

GeM SAHAYAK Program

In a bid to further enhance accessibility and efficiency in public procurement, GeM announced the 'GeM SAHAYAK' program. This initiative aims to establish a nationwide network of 6,000-7,000 trained and accredited trainers. These trainers will assist sellers and buyers in effectively navigating the GeM portal, ensuring that stakeholders can leverage the platform's capabilities to the fullest.

Supporting Local Businesses

In alignment with the government's commitment to supporting local businesses, GeM has revised its revenue policy, reducing transaction charges for sellers. Under the new policy, sellers will now be charged only 0.30% of the order value (down from 0.45%) for orders exceeding US$ 5,987.54 (Rs. 5 lakh), with the maximum charge capped at US$ 3,592.53 (Rs. 3 lakh). This reduction aims to lower the cost of doing business on the GeM platform, making it more attractive for local businesses to participate in government procurement.

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Promotion of Indigenous Goods

Further reinforcing its commitment to promoting Indigenous goods, GeM introduced 'The Aabhar Collection', a special initiative showcasing hand-crafted products from the One District One Product (ODOP) and Geographical Indication (GI) categories. This initiative not only highlights the rich cultural heritage and craftsmanship of various regions but also provides a platform for local artisans and producers to reach a broader market.

Future Outlook

As the GeM platform continues to expand and evolve, its impact on public procurement in India is becoming increasingly significant. The platform's ability to streamline procurement processes, reduce costs, and support local businesses positions it as a critical tool for achieving government procurement objectives. The ongoing enhancements, such as the GeM SAHAYAK program and reduced transaction charges, are likely to drive further adoption and growth.

With the GeM platform on track to become the world's largest procurement platform, it is poised to set new benchmarks in efficiency, transparency, and inclusivity in public procurement. The concerted efforts of central ministries, CPSEs, and the strategic initiatives undertaken by GeM underscore the platform's pivotal role in transforming government procurement in India.

In conclusion, the GeM platform's remarkable growth in the first quarter of FY25 highlights its potential to revolutionize public procurement. By fostering a more inclusive and efficient procurement environment, the GeM platform is not only enhancing government operations but also contributing to the broader economic development of the country. The continued focus on supporting local businesses and promoting Indigenous goods further cements GeM's role as a key driver of sustainable economic growth.

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