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To foster the start-up ecosystem in the State, the Tamil Nadu government on Thursday has announced new concessions to registered start-ups for public procurement below ₹20 lakh.
There will be concessions in payment of earnest money deposit (EMD); exemption from the condition of prior turnover; exemption from the condition of prior experience and waiver of tender cost, says a government order issued by V Arun Roy, MSME Secretary.
Nearly 8,000 start-ups would be eligible for this concession, Roy told BusinessLine.
Procurement preference
Procurement entities include government departments, public sector undertakings of the government, statutory board formed by the government, local bodies in the State; co-operative institutions in the State and universities.
The concessions were based on recommendation of the Mission Director, Tamil Nadu Startup and Innovation Mission (TANSIM), who stated that start-ups in the State are technically capable of providing solutions to various governance and other issues faced by departments in implementing various schemes.
Providing procurement preference to start-ups will also help them to scale up rapidly and create enormous employment and wealth in the State.
Providing a market
Many start-ups struggle in the early stages because of a lack of market for their products. Government is a major purchaser in the economy and government patronage can solve the marketing problem of start-ups to a great extent. Moreover, purchases by the government is a great source of recognition to the start-ups.
However, it is seen that start-ups face many entry barriers because Departments and Public Sector Undertakings impose restrictions like EMD, prior turnover condition and prior experience condition.
Many States have recognised this problem and have issued orders dispensing with such entry barriers for start-ups. Kerala and Telangana have already made such provisions by issuing necessary orders in this regard.
It was, therefore, proposed to provide support to the start-ups registered with TANSIM through the StartupTN portal. This was accepted by the government and approved accordingly, the order said.
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