Procurement of services through Government e-Marketplace (GeM) has grown significantly, from nearly ₹8,500 crore in FY21 to nearly ₹66,000 crore in FY23 to nearly ₹1,82,000 crore in FY24 (as on February 22, 2024) – a significant increase of nearly 176% from last fiscal year. Total value of procurement of services exceeding the total value of products procurement in a Financial Year is an important milestone which indicates the faster acceptability of services by various buyers. In February 2024, services procurement has been phenomenal, contributing to nearly 80% of the total order value transacted on GeM. The share of procurement of services in overall procurement has exceeded the 50% mark in the current financial year. Two bids placed by South Eastern Coalfield Limited, a subsidiary of COAL India Limited, worth nearly ₹40,000 crore, have catapulted the share of service procurement in this month.

Commenting on this significant achievement, CEO, GeM, Shri P K Singh said that the GeM has harnessed digital capabilities and has emerged as a one-stop-shop for procurement of all possible services that may be required by Government buyers at various levels of administration. He said that the expansion of the service offerings on GeM has been the brightest chapter in the platform’s success story, witnessing exponential growth over this miniscule period.

The expanded bouquet of services on GeM has given a tremendous boost to the GeM Gross Merchandise Value (GMV). In this year alone, nearly 457 orders, worth ₹4,036 crore, have been placed for procuring 9 types of insurance services such as Group Mediclaim Insurance Service, Asset Insurance Service, Group Term Insurance Service etc. Government of Gujarat has procured Group Mediclaim Insurance Services worth ₹2,302 crore under Pradhan Mantri Jan Arogya Yojana to extend insurance cover to nearly 62 lakh families.

Innovative and unique service offerings like Local Chemist Empanelment have resulted in an average discount of 30-32% on supply of medicines through GeM’s e-bidding process. This has prompted the Central Government Health Scheme, Employees & State Insurance Corporation, and multiple State Health & Family Welfare Departments to actively procure these services through GeM.

Procurement of services like Hiring of Consultants and PR Agency, Outdoor Advertisement Services and Exhibition / Event / Seminar Management Services, has enabled Government bodies to make informed policy-making decisions and effectively disseminate information. By investing in these kinds of services, Government buyers have improved their capabilities and service delivery to better serve the needs of the citizens of the country.

Services procurement on GeM has also given huge impetus to key social welfare initiatives like Jal Jeevan Mission, POSHAN 2.0 etc. To further the vision of a Swachh Bharat, GeM has created separate categories for hiring of sanitation services, including collection, disposal, and management of waste. This service is being regularly procured by Urban Development & Housing Department, Bihar, which placed 35 orders across various urban local bodies for collection, lifting, transportation and disposal of waste. Similar contracts have also been placed by Urban & Local bodies in various states like Jammu & Kashmir, Andaman & Nicobar Islands, Uttarakhand and Delhi.

This remarkable trend underscores the increasing recognition of services as a strategic asset and highlights the importance of robust procurement infrastructure in streamlining public procurement processes. This unprecedented growth attests GeM’s scalability and adaptability and the pivotal role it plays in driving India’s economic growth.

GeM was established in 2016 to provide Government buyers an end-to-end digital platform to carry out public procurement of goods at cost-effective rates. In FY19-20, the platform diversified its portfolio to include services as a separate segment by offering government buyers the flexibility to hire very few basic services like Manpower Hiring, Cab Hiring, Security Services and Cleaning & Sanitation services, through tools like e-bidding and reverse auction.

Services procurement on GeM now dominates procurement value, driven by digital categories and competitive e bidding efficiencies. GeM's expanded digital procurement platform and dedicated service categories have caused services procurement to surpass goods procurement in value; adoption of e bidding, reverse auction and modular service offerings (including insurance, chemist empanelment, sanitation, consultancy and event management) has produced cost efficiencies and enabled large scale and programmatic procurements by central and state buyers and urban local bodies, thereby integrating services into mainstream public procurement and improving buyer capability and service delivery.