Defence services, organisations purchase from MSMEs on GeM up 72%: Defence Secretary Ajay Kumar

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January 12, 2021 4:34 PM

Ease of Doing Business for MSMEs: Importantly, the biggest jump in defence procurement from MSMEs was recorded between FY18 and FY19 with order value witnessing a massive increase of 210 per cent from Rs 555 crore worth goods purchased on the GeM platform to Rs 1,725 crore during the said period.

The number of MSME vendors of Defence Public Sector Enterprises/Ordnance Factory Board increased from 7,591 in FY18 to 8,643 in FY19. (File image)

Ease of Doing Business for MSMEs: Online procurement of goods on the government’s digital marketplace, Government e-Marketplace (GeM) by defence services and organisations under the Ministry of Defence grew 72 per cent by end of December FY21 from around the year-ago period, according to Defence Secretary Ajay Kumar. “Defence Services & organizations are adopting Government eMarketplace in their procurements rapidly. 72% growth in 2020-21 over 2019-20,” said Kumar sharing data on microblogging site Twitter. From goods procured worth Rs 1,406 crore as of November 30, 2019, the order value grew to Rs 2,425 crore, as per data shared on New Year’s Day. The overall procurement by defence organisations and departments for FY20 stood at Rs 2,810 crore.

Importantly, the biggest jump in defence procurement was recorded between FY18 and FY19 with order value witnessing a massive increase of 210 per cent from Rs 555 crore worth goods purchased on the GeM platform to Rs 1,725 crore during the said period. Launched on August 9, 2016, to enhance speed and transparency in the government buying process to benefit small businesses, the marketplace saw procurement of defence-related goods worth Rs 19 crore during FY17.

Financial Express Online had in December reported the overall transaction value on GeM crossing Rs 74,552 crore as of December 30, 2020. The marketplace had 17.6 lakh listed products, 9 lakh sellers and service providers, and 11,543 product categories. The number of micro and small sellers on the GeM platform had crossed the 1.5 lakh mark in November last year – up 158 per cent from around 60,000 in November 2019 with 57.50 per cent share in total order value. As of January 12, 2021, 4.1 lakh sellers were MSEs out of 9.44 lakh total sellers on the GeM platform.

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In July 2020, the government had said that MSMEs will be prime-tier vendors in the procurement of defence equipment by the government from the industry for Rs 31,130 crore approved by Defence Acquisition Council (DAC) on July 2, 2020. DAC in its meeting headed by Defence Minister Rajnath Singh had approved proposals worth around Rs 38,900 crore for “capital acquisition of various platforms and equipment required by the Indian Armed Forced.”

The number of MSMEs in the domestic defence production sector had increased 21 per cent till Q2 FY20 from the entire FY19, according to the data shared by the MSME Minister Nitin Gadkari in Rajya Sabha in March last year. The number of MSME vendors of Defence Public Sector Enterprises/Ordnance Factory Board stood at 7,591 MSME vendors in FY18. This had increased to 8,643 vendors in FY19 and further to 10,506 till Q2 FY20.

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