New Delhi, Sept 22 (KNN) Based on a proposal submitted by Kerala Startup Mission (KSUM), the departments under the Kerala government are now allowed to purchase software products, services and mobile apps worth Rs 20 lakh a year from start-up firms.

In an effort to boost domestic entrepreneurs, Kerala government has increased the cap on direct purchase of products from approved ventures from Rs 5 lakh to Rs 20 lakh.

The move has been taken in accordance with the policy of bringing government as an early marketplace and will give a stimulus to the startup ecosystem in Kerala.

Departments under the Kerala government will be able to make purchases from only those startups that are registered with the Union Department of Industrial Policy and Promotion (DIPP) and Kerala government.

Commenting over thus move, KSUM, CEO, Saji Gopinath, said “The government order will help start-ups to work closely with the government and come up with innovative solutions. The recent floods also proved the start-ups’ capability of supporting the government in disaster management.”

However, as per the government orders, one purchasing officer cannot purchase more than two applications in one year from the same start-up.

Further, the benefits of the government order includes 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.