Government agencies may not relax procurement
norms for startups on prior experience and turnover criteria in respect of goods that have implications on public safety
Earlier, the government had said that all central ministries and department "may relax" condition of prior turnover and prior experience in public procurement
to all startups if they meet quality and technical specifications.
However, a doubt had arisen if it makes optional for central ministries and departments to relax the condition of prior experience and turnover in public procurement
to startups, said an office memorandum of Expenditure Department.
It said that "normally" for all public procurement, government departments and ministries should ensure that experience and turnover criteria are relaxed.
"However, there may be circumstances like procurement
of items related to public safety, health, critical security operations
where procuring entities may prefer the vendors to have prior experience rather than giving orders to new entities. For such procurements, wherever adequate justification exists, the procuring entities may not relax the criteria of prior experience/ turnover for the startups," the communications said.
India has the third-largest number of startups globally. In January, Prime Minister Narendra Modi
had unveiled a slew of incentives for them including tax holiday, inspector raj-free regime, capital gains tax exemption, Rs 10,000 crore corpus to provide funds, and relaxation in procurement
In its October monetary policy review, the Reserve Bank of India said startups can raise external commercial borrowings of up to 3 million in a financial year, with a view to boosting innovation and promoting job creation.