Government increases cap on direct purchase of IT products from Kerala start-ups

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Trivandrum: 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 Rs.5 lakhs to Rs.20 lakhs. The startup has to be registered with the Department of Industrial Policy and Promotion (DIPP), Government of India and should be registered 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 is directly purchasing startup products worth Rs 5 lakhs and this Rs 5 lakhs 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 the 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 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.

Kerala IT News

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