Kerala Government Increases Purchase Ceiling for Startups to Rs 3 Crore

By siliconindia  |  Friday, 02 June 2023, 08:44 IST

Kerala Government Increases Purchase Ceiling for Startups to Rs 3 Crore
The Kerala government has announced a significant increase in the limit for procurement of goods and services from startups registered with KSUM. The ceiling has been raised from Rs 1 crore to Rs 3 crore in order to enhance the startup ecosystem in the state. This decision will impact government departments, public sector undertakings (PSUs), boards, corporations, and local self-government (LSG) institutions, as they can now make larger purchases from ventures registered under the Kerala Startup Mission (KSUM). The statement regarding this change was made.
KSUM serves as the primary agency of the Kerala government for fostering entrepreneurship development and supporting incubation activities within the state. By increasing the monetary ceiling in public procurement, the government aims to promote the adoption of innovative technologies and foster collaboration between startups and government entities.
According to the government’s issued order, the advantages previously granted to IT-related startups have now been expanded to non-IT ventures. This means that public sector undertakings (PSUs), boards, corporations, and local self-government bodies (LSGs) are now authorized to procure goods and services from non-IT startups registered under KSUM. The statement further mentioned that Kerala, with its 49 parent departments and over 1,000 sub-organizations, allows all government entities to engage in purchases from startups registered under KSUM, in accordance with the order.
In addition, the government has raised the limit for procuring services and products from startups registered with KSUM, who possess a unique ID, without the need for tender procedures. The ceiling has been increased from Rs 20 lakh to Rs 50 lakh. To facilitate this process, the Stores Purchase department and the Electronics & Information Technology department have jointly released terms and conditions, along with guidelines, for the procurement of both IT and non-IT products and services from startups affiliated with KSUM. 
According to the statement, the state-run agency, KSUM, has introduced a prominent initiative known as ‘Government As a Marketplace.’ This flagship project aims to facilitate the provision of innovative services and products offered by startups to various government departments. Anoop Ambika, the CEO of KSUM, emphasized the significance of early product adoption for startups to achieve rapid growth. He highlighted how the government, as an adopter, plays a crucial role in supporting startups by embracing their innovative solutions and contributing to their exponential growth.
Varun G, the Project Head of ‘Government As a Marketplace,’ reported that the project has successfully completed approximately 188 procurements, amounting to a total of Rs 17 crore. This initiative has received approval from Startup India and the Department for Promotion of Industry and Internal Trade (DPIIT), and its implementation has been recognized as a best practice for other states to emulate. As per the statement, the ‘Government As a Marketplace’ project has benefitted 107 government departments. 
The government has recently provided departments with guidelines on acquiring products and services from startups through various projects such as Market Placement Scheme, Demand Day, Demo Day, Direct Procurement, and Innovation Zone. According to the new government order (GO), startups that have completed three years since their registration or three years since receiving product approval from KSUM are eligible to avail the scheme’s benefits. Additionally, any startup that relocates to Kerala can also take advantage of the opportunities offered by the ‘Government As a Marketplace’ project.

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