Tuesday, January 26, 2016

Startup India : Public Procurement Rule Tweaked !

Objective for Public Procurement Relaxed Norms

To  provide an  equal platform to Startups (in the manufacturing sector) vis-à-vis the experienced entrepreneurs/ companies in public procurement


Typically, whenever a tender is floated by a Government entity or by a PSU, very  often the eligibility condition specifies either “prior experience” or “prior turnover”. Such  a stipulation prohibits/ impedes Startups from participating in such  tenders.

At  present,  effective April  1,   2015 Central Government, State  Government and  PSUs   have to mandatorily procure at least 20% from the Micro Small and Medium Enterprise (MSME).

In order to promote Startups, Government shall exempt Startups (in the manufacturing sector) from the criteria of  “prior  experience/  turnover” without any  relaxation in quality standards  or  technical parameters. The Startups will also  have to demonstrate requisite capability to execute the project as per the requirements and should have their  own manufacturing facility in India.

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