VISAKHAPATNAM: In a move to bolster innovation and support budding enterprises, the Government of Andhra Pradesh has announced relaxation of public procurement norms for DPIIT (Department for Promotion of Industry and Internal Trade) recognised startups registered in the State.
This initiative aims to create a conducive environment for startups to access markets, and compete with established businesses effectively.
The decision comes in light of challenges faced by startups in securing government contracts due to stringent tender criteria, such as prior turnover requirement and experience as well as mandates for Earnest Money Deposit (EMD).
Recognising the vital role of government procurement in the economy, it intends to provide preferential access to these startups, enabling them to leverage innovative solutions for improved public service delivery.
Several other States, including Kerala, Karnataka, Tamil Nadu, Odisha and Telangana, have already implemented relaxed procurement norms to aid their startup ecosystems. The State government has taken note of these successful measures, and promised to provide similar opportunities to its startups. According the a GO issued on February 24, under the new guidelines, eligible DPIIT-recognised startups must have a registered office in Andhra Pradesh, and an existing product or service available in the market upon the issuance of a tender.
Additionally, startups must meet at least one of the following criteria: Be recognised as a winner or runner-up in any international, national or State-level innovation challenges or hackathons; secure grants or funding of `25 lakh or more through national or State-supported schemes; or possess a patented technology or product that is currently available in the market.
For public procurement valued up to `50 lakh, eligible startups will benefit from several relaxations, which include exemption from the EMD requirement, prior turnover and experience requirements, and a full waiver of the cost of tender documents. These provisions will be applicable to all the government departments, autonomous organisations, universities, development authorities, and other public sector entities in AP. The authorities are expected to ensure the effective implementation of these relaxations, which apply to all tenders issued after this order.
“The Preferential Market Access (PMA) for startups is a revolutionary step in AP. I believe AP is the first State in India to offer preferential market access, enabling startups to participate in government tenders up to `50 lakh, including those with departments, agencies, corporations, universities & PSUs. This initiative supports local startups in a big way. We have been striving for the PMA for a long time, and we are thrilled to finally have it. This success will create significant momentum for startup activity in AP, and we eagerly anticipate further policies that will promote startups and innovation,” opined Sreedhar Kosaraju, APDTI Network Director.