Kerala Government to procure products worth up to Rs 20 lakh directly from DIPP-registered startups

The limit of Rs 5 lakh is enhanced to Rs 20 lakh per startup


Thiruvananthapuram, Sept. 19: In a major boost to startups, the State Government has increased the cap on direct purchase of software products, services and mobile app from the ventures cleared by the Kerala Startup Mission (KSUM) from 5 lakh to 20 lakh. The startup has to be registered with the Department of Industrial Policy and Promotion (DIPP), Government of India and should be registered in Kerala.

Now, the departments can purchase products from startups worth Rs 20 lakh per year, and the same amount is excluding GST.

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 is directly purchasing startup products worth Rs 5 lakh and this Rs 5 lakh ceiling seems to be a challenge in enhancing the scope of innovative products in government departments. This GO will help startups to work closely with government and come up with innovative solutions, which are useful for the departments. The recent floods also proved the startups’ capability of supporting the government in disaster management,” said Dr Saji Gopinath, CEO, KSUM.

As per the Government Order (GO) in this regard, one purchasing officer, however, cannot purchase more than two applications in one year from one startup.

The government has enhanced the financial limit from Rs 5 lakh to Rs  20 lakh exclusive of the GST for the direct purchase of mobile app, all software products and services of startup projects from among the list cleared by the KSUM and those who 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 start-ups, 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.  

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