Government procurement in India, representing a staggering ₹60 trillion annually—approximately 15-20 per cent of the nation’s GDP—has increasingly come under scrutiny. Traditionally viewed through a political lens, where contracts often serve as a tool for patronage or protectionism, the focus should shift to enhancing expenditure efficiency. The role of the state as a fiduciary for taxpayers underscores the need for transparency and accountability in how public funds are allocated.
A significant development in this realm has been the introduction of the Government e-Marketplace (GeM), launched in 2016 to facilitate a more efficient procurement process across central government departments. The GeM platform has recently recorded transactions exceeding ₹4 lakh crore for the period of April to January in the fiscal year 2024-25, thanks to a marked increase in purchasing activity by various ministries. This surge not only reflects enhanced government procurement efficiency but also a commitment to transparency that was previously lacking in traditional processes.
The importance of GeM cannot be overstated. It aims to streamline procurement by aligning with sustainable development goals, fostering inclusivity, and ensuring that vendors—whether domestic or foreign—compete on an equal footing. With recent policy shifts, particularly in line with international free trade agreements, there is a clear intent to integrate foreign firms into the procurement landscape, promoting healthy competition and optimal value for money in public purchasing.
The growth of GeM has been remarkable, with procurement through the platform surging from ₹66,000 crore in the fiscal year 2023 to an anticipated ₹1,82,000 crore in 2024—an astounding increase of 176%. This trajectory points to the platform’s expanding role in enabling a more efficient and transparent procurement process, paving the way for better governance and accountability. Moreover, the recent expansion of GeM’s functionalities has revolutionised the procurement landscape, demonstrating that digital innovation can significantly enhance public service delivery.
The broad public procurement market in India, estimated to be worth between $500 billion and $500 million annually, plays a crucial role in supporting infrastructure development and social welfare initiatives. A projected ₹45 lakh crore in government spending for the 2024-25 period indicates a 6% rise year-on-year, highlighting the vital connection between effective procurement practices and overall economic growth.
As India moves forward, it must grapple with the dual challenge of leveraging public procurement for economic enhancement while ensuring it does not become a tool for narrow political interests. A renewed focus on efficiency and transparency, driven by platforms like GeM, could be pivotal in reshaping how public funds are used, ultimately benefiting broader society and supporting sustainable development.
In summary, the evolution of government procurement through digital transformation not only aims to modernise processes but also to uphold the principles of transparency and inclusivity. The path forward requires commitment and vigilance to ensure that these initiatives fulfil their promise in driving growth and innovation for the public good.
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Source: Noah Wire Services
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