Defence Ministry nearly doubles its purchases worth crores from MSMEs in FY23
- IBEF
- April 14, 2023
The Government e-Marketplace (GeM) has seen a nearly two-fold increase in the Ministry of Defence's online purchases of goods and services from medium, small, and micro enterprises (MSMEs) and other sellers in the financial year 2022-23 compared to the previous fiscal. The Ministry of Defence is one of the largest purchasers of goods from MSMEs. According to GeM, the ministry spent US$ 3.48 billion (Rs. 28,732.9 crore) on goods and services in FY23, a rise of 90.4% from US$ 1.82 billion (Rs. 15,090.8 crore) in FY22.
In fact, the defence ministry led all other departments in 2022 in terms of MSME procurement. The ministry has made purchases using the platform worth US$ 2.02 billion (Rs. 16,747 crore) in 2022, GeM informed.
In addition, MSME vendors' sales to the government's defence forces have also increased. The total MSME vendors supplying to the Defence Public Sector Units (DPSUs) had jumped to 10,506 till the second quarter of FY20 from 8,643 in FY19.
The increased defence spending by MSMEs became significant as India's defensive capabilities were developed over time. As a result, the government increased the defence budget allocation from US$ 64 billion (Rs. 5.25 lakh crore) in FY23 to US$ 72 billion (Rs. 5.94 lakh crore) in FY24.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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