Kerala govt raises ceiling on purchase of products from startups to Rs 3 Cr

The Kerala government has considerably increased the ceiling on the purchase of products and services from startups registered with KSUM from Rs 1 crore to Rs 3 crore in its effort to boost the state's startup ecosystem.

The raising of the public procurement ceiling on the purchases by government departments, public sector undertakings (PSUs), boards, corporations, and local self-government (LSG) institutions from ventures registered under the Kerala Startup Mission (KSUM), was announced by it in a statement on Wednesday.

KSUM is the nodal agency of the Kerala government for entrepreneurship development and incubation activities in the state.

The increase in the monetary ceiling in public procurement will enable more government departments to leverage innovative technology solutions from startups, it said.

As per the government order (GO) issued in this regard, the benefits enjoyed by IT-related startups have been extended to non-IT ventures as well, thereby enabling PSUs, boards, corporations, and LSGs to purchase products and services from non-IT startups registered under KSUM.

Kerala has 49 parent departments along with more than 1,000 sub-organisations, and, as per the GO, all government organisations can purchase products and services from startups registered under KSUM, the statement said.

The government has also increased the ceiling for availing services and products from startups having the unique ID of KSUM without tender procedures from Rs 20 lakh to Rs 50 lakh.

In this regard, the Stores Purchase department and Electronics and Information Technology department have issued terms and conditions along with guidelines on the procurement of products and services of IT and non-IT startups from KSUM.

The state-run agency has launched a flagship project called 'Government As a Marketplace" for providing the innovative services and products of startups to government departments, the statement said.

Anoop Ambika, CEO of KSUM, said early product adoption is always critical for startups to scale up, and the government as an adopter helps startups grow exponentially while adopting innovative solutions.

Project Head of 'Government As a Marketplace' Varun G said around 188 procurements totalling Rs 17 crore have been done till now under this project. It has also been approved by Startup India and the Department for Promotion of Industry and Internal Trade (DPIIT) and replicated in various states as the best practices to follow.

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Around 107 government departments are beneficiaries of the 'Government As a Marketplace' project.

Also, world-class startups like Genrobotics, Bagmo, etc., have developed innovative solutions through this project, according to the statement.

The government has also issued guidelines for departments on obtaining products and services from startups through projects like Market Placement Scheme, Demand Day, Demo Day, and Direct Procurement and Innovation Zone.

As per the new GO, startups that have completed three years from the date of their registration or three years from the date of the product approval by KSUM are eligible for the benefits of the scheme. Also, any startup that relocates to Kerala can avail the benefits of the 'Government As a Marketplace' project.