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Defence Ministry’s procurement from MSMEs on GeM portal hits all-time high in FY22

Ease of Doing Business for MSMEs: The procurement jumped over 250 per cent in the financial year 2021-22 from the previous year.

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Defence procurement on GeM reached an all-time high of Rs 15,047.98 crore during FY22.. (Image: PIB)

Ease of Doing Business for MSMEs: Purchase of defence-related goods and services by the Defence Ministry from micro, small and medium enterprises (MSMEs) and others on the government’s business-to-government (B2G) portal Government eMarketplace (GEM) jumped over 250 per cent in the financial year 2021-22 from the previous year. According to a statement by the ministry on Saturday, procurement orders through GeM reached an all-time high of Rs 15,047.98 crore during FY22.

“The GeM was started in August 2016 to revamp the old tender process and bring greater probity and transparency in government procurement through digitisation. In a short span since its inception, the Ministry of Defence has embraced the digital drive and embarked on this path with absolute resoluteness. Despite multiple challenges on the ground, the results have been astounding,” the ministry said. 

The total MSME vendors supplying to the Defence Public Sector Units (DPSUs) were 10,506 till Q2 FY20, up from 8,643 in FY19, and 7,591 in FY18, according to the data shared by the former MSME Minister Nitin Gadkari in Rajya Sabha in March 2020. By December 2021, the total count had jumped to 12,000. As a result, the procurement value by DPSUs from MSMEs had increased from Rs 4842.92 crore in FY19 to Rs 5463.82 crore in FY21.

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Moreover, the government had launched ‘MAKE Projects’ in Defence Acquisition Procedure (DAP) 2020 to enable indigenous design and development of defence equipment both with government funding and industry funding. According to the government’s Make in India portal, the MAKE Projects has been instrumental in improving MSMEs’ role in defence with over 40 per cent of the project sanction orders issued to MSMEs and projects amounting to over Rs 1,000 crores reserved for MSMEs. 

Meanwhile, GeM has overall 42.35 lakh sellers and nearly 60,000 government departments across ministries as buyers with over 1 crore orders worth Rs 2.40 lakh crore processed so far. Out of the total seller count, 7.70 lakh were micro and small enterprises with 56 per cent share in the order value on GeM.

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