UP Proposes Direct Procurement Up To Rs 50 Lakh From StartinUP-Registered Startups

Lucknow, Sept 7 (KNN) The Uttar Pradesh government is preparing a comprehensive policy to expand market access for startups by promoting the procurement of their products and services by government departments.

Under the proposed policy, departments will be allowed to procure products, services and equipment directly from startups registered on the StartinUP portal, with the government planning amendments to its existing procurement framework.

Direct Procurement Up To Rs 50 Lakh

Government departments may be permitted to directly purchase products and services worth up to Rs 50 lakh from registered startups without inviting tenders.

At present, departments can make purchases of up to Rs 25,000 without a tender, while purchases up to Rs 50,000 can be made through the Government e-Marketplace (GeM) based on three quotations. Purchases exceeding Rs 5 lakh generally require a tender.

For purchases between Rs 50 lakh and Rs 1 crore from startups outside the higher-limit categories, procurement is proposed to be conducted through GeM, with participation restricted to registered startups.

The proposal is expected to be placed before the state Cabinet soon. A dedicated Startup E-Marketplace is also being developed under the UP Startup Mission.

Higher Limit For Emerging Technology Startups

The proposed policy is also expected to provide a higher direct procurement limit for startups operating in emerging technology sectors.

Startups working in areas such as deep tech, space technology, quantum computing, blockchain, agri-tech, med-tech, green energy, artificial intelligence (AI) and drones may be allowed direct government purchases of up to Rs 1 crore, twice the proposed limit for other startups.

The government is also formulating transparent rules and procedures to govern direct procurement from startups.

Departments May Reserve 0.5 per cent Budget

The policy may require government departments to earmark around 0.5 per cent of their annual budgets for procuring innovative products developed by startups.

It also proposes a structured payment mechanism, under which startups could receive 30 per cent advance payment upon placement of an order, followed by 60 per cent upon completion of product delivery or service installation.

Policy Aims To Strengthen Startup Ecosystem

According to a senior official of the IT and Electronics Department, the policy aims to provide startups with a reliable market through government procurement and strengthen their financial position.

The move is also expected to encourage innovation and generate employment opportunities while creating greater demand for startup-developed products and services across the state.

(KNN Bureau)