In a significant boost to the startup ecosystem, the Kerala Government has taken a proactive step by raising the procurement limits for startups registered with the Kerala Startup Mission (KSUM). This move is aimed at fostering innovation, encouraging entrepreneurship, and creating more avenues for startups to thrive in the state. The Government has announced an increase in the ceiling for public procurement, allowing government departments, public sector undertakings (PSUs), boards, corporations, and local self-government institutions to purchase products and services worth up to Rs 3 crore from startups registered under KSUM.
The decision to raise the procurement limits was made with the intention of promoting a conducive environment for startups and providing them with ample opportunities to showcase their innovative solutions. By increasing the monetary ceiling, more government departments will be able to leverage the cutting-edge technology and transformative ideas offered by startups. This step highlights the government’s commitment to supporting and nurturing the startup community in Kerala.
The revised guidelines extend the benefits of the procurement scheme to both IT and non-IT startups, opening up avenues for a broader range of ventures to collaborate with government entities. This means that PSUs, boards, corporations, and local self-government institutions can now engage with non-IT startups registered under KSUM to avail their products and services. With 49 parent departments and over 1,000 sub-organisations in Kerala, the government’s decision ensures that all government entities have the opportunity to explore partnerships with startups registered under KSUM.
Furthermore, the government has also raised the ceiling for availing services and products from startups without the need for tender procedures. Startups with the unique ID of KSUM can now provide services and products worth up to Rs 50 lakh to government departments, simplifying the procurement process and facilitating smoother collaborations.
To facilitate the seamless integration of startups into government processes, the Kerala government has implemented the “Government As a Marketplace” project. Under this flagship initiative, startups can showcase their innovative offerings directly to government departments, enabling early product adoption and exponential growth. The success of this project is evident, with approximately 188 procurements worth Rs 17 crore already completed. Recognizing its effectiveness, the project has been approved by Startup India and the Department for Promotion of Industry and Internal Trade (DPIIT) and has been adopted as a best practice in several states.
In addition to increasing procurement limits, the Government has issued comprehensive guidelines for departments on procuring products and services from startups. Initiatives like Market Placement Scheme, Demand Day, Demo Day, and Direct Procurement and Innovation Zone have been introduced to streamline the process and encourage greater engagement between Startups and Government departments.
To be eligible for the benefits of the procurement scheme, startups must have completed three years from the date of their registration or three years from the date of product approval by KSUM. Furthermore, any startup that relocates to Kerala can also avail the benefits offered by the “Government As a Marketplace” project, emphasizing the Government’s commitment to attracting and supporting startups from across the country.
Overall, the Kerala Government’s decision to increase procurement limits for startups reflects its dedication to fostering an inclusive entrepreneurial ecosystem. By providing enhanced opportunities for startups to collaborate with Government entities, Kerala aims to become a thriving hub of innovation and economic growth.
