State Govt. Raises Ceiling on Purchase of Startup Products
Thiruvananthapuram: In a major boost to the startup ecosystem in Kerala, the State Government rendered more purchasing power to departments to shop from startups In a major boost to startups, the State Government has increased the cap on direct purchase of software products, services and mobile apps from the ventures cleared by the Kerala Startup Mission (KSUM) from Rs. 5 lakh to 20 lakh. The startup has to be registered with the Department of Industrial Policy and Promotion (DIPP), Government of India and incorporated in Kerala. The Government decision came in response to a proposal submitted by KSUM in accordance with Government policy of bringing Government as an early marketplace. This will be a major boost to the startup ecosystem in Kerala. “Government of Kerala has been directly purchasing startup products worth Rs. 5 lakh. However, this Rs. 5 lakh-ceiling seemed to be a challenge in enhancing the scope of innovative products in government departments. The latest Government Order (GO) will help startups to work closely with government and come up with innovative solutions,” said Dr. Saji Gopinath, CEO, KSUM. As per the GO in this regard, one purchasing officer, however, cannot purchase more than two applications in one year from one startup. A four-member committee will review the products submitted by the startups which will be finalized by them later. “The recent floods also proved the startups’ capability of supporting the government in disaster management,” Dr. Saji added. The new ceiling is exclusive of the GST for the direct purchase of mobile app, software products and services of startup projects from among the list cleared by the KSUM and those registered with the DIPP. The GO explains other benefits such as exemption of Earnest Money Deposit (EMD), bid security, cost of tender forms and security deposit to all startups, which are registered with Stores Purchase Department as in the case of Micro, Small and Medium Enterprises (MSMEs). The decision is also aimed at extending to the startups the benefit of exemption from previous experience and turnover requirements. To provide yet another boost for the startup ecosystem in the State, KSUM also signed an agreement with the Centre for Development of Advance Computing (CDAC) to set up an Accelerator for Electronic Technologies for supporting the digital technology startups that have moved to the scaling up stage. Accelerator for Electronic Technologies will host growth stage enterprises focusing on technology products and services and develop sustainable enterprises in electronics technology.