The Indian Army has projected to buy spares, medicines, and work modules worth ₹16,000 crore through Government e-Marketplace (GeM) in the coming financial year, scaling up its procurement through this preferred platform from ₹21 crore in 2017 to over ₹15,433 crore in FY 2023-24.
This digital transformation of acquisition will enable nearly 50 per cent of Army’s revenue budget of ₹25,000 crore to be handled through the GeM, said a senior Army officer.
Of the total procurement of over ₹15,433 crore in FY 2023-24, the Army officials said the force onboarded critical items like rations, medical equipment, and expendable stores (perishable items), which together came to ₹5,000 crore. Meanwhile, the orders placed through the GeM in FY 2022-23 were ₹9,202 crore, said officials.
The GeM, under the General Financial Rules 2017, has emerged as the primary platform for procurement by the Army, providing price discovery tools, enhancing transparency and ease of business.
As part of a round transformation of its financial architecture, the Army is also adopting automation to enhance efficiency and transparency in financial management.
The Financial Planning Directorate, which is the highest body for budgeting in Army that is supervised directly Chief of Army Staff and Vice Chief of Army Staff, is implementing basic automation, including Financial Data Visualization and uploading compiled data through the Financial Planning Management Information System, the officer said.
The Army has conceptualised the Indian Army Financial Information System (IAFIS) to achieve a fully integrated and comprehensive financial automation system.
After extensive collaboration with various organisations like the Public Financial Management System (PFMS), CGDA, and GeM, the project’s Request for Proposal (RFP) was uploaded on GeM on August 2, 2024, Army sources said.
The Army officials stated that their increased adoption of competitive bidding, which accounts for 80 per cent of procurement through bids or reverse auctions, and 20 per cent through direct procurement, has resulted in considerable savings for the state exchequer.
These measures, combined with the Army’s focus on fostering small and medium-sized enterprises (SMEs) and digitising financial and procurement operations, have significantly improved budget management and ensured real-time monitoring, enhanced transparency, and traceable audit trails, a senior officer observed.