Role of startups in adding strength to economy gets highlighted

Kerala Finance Minister terms startups as a vital component of the state’s economy

Startups have a key role in strengthening the Kerala economy as leveraging their innovative ideas can lead to remarkable growth in various sectors, according to the state’s Minister of Finance K N Balagopal.  Speaking after inaugurating the country’s largest Business to Government (B2G) summit, organised by Kerala Startup Mission (KSUM) in the state capital city, Balagopal said the government is considering a proposal to raise the ceiling on purchase of startup products.

The B2G meet aims at setting a platform for the startups to showcase a wide range of products and services required by the government departments and the public sector undertakings (PSUs). Titled ‘Public Procurement Summit 2022’, the event focuses on firming up the linkage between the startup ecosystem and the government.

Balagopal said by embracing the innovative ideas generated by the startups, the state will be able to significantly scale up agriculture and value-addition process. Startups can also contribute immensely to the growth of all key sectors, including the healthcare and animal husbandry, he said. The procurement of startup products and service by the government departments and PSUs had been formalized by IT Policy in 2017, mandating that the government should act as an early adopter of promising technology startups in the state.

Ceiling on purchase of products, services from startups to be raised

The government is planning to enhance the ceiling on purchase of products and services from startups. Now, startup products and services of up to Rs 20 lakh can be directly procured and those costing from Rs 20 lakh to Rs 1 crore can be procured through a limited tender process. The government is planning to increase the ceiling of limited tender from Rs 1 crore to Rs 3 crore, he said.

Citing the economic turmoil in Sri Lanka, he said the troubles faced by the island nation is a reminder of the need for developing a strong local economy since a reverse trend of globalisation is happening currently.

Tech solutions for the benefit of society

Startups need to learn to grow beyond their initial run of success. The government is duty bound to help startups coming up with innovative ideas. About Rs 97 crore has been set apart in the budget for startups apart from the Rs 250 crore as Venture Capital fund.

Drawing attention to the fact that Kerala is fast becoming the startup capital of the country, K R Jyothilal, Principal Secretary, General Administration Department and Transport, said the state stands to can gain a prominent place in clean tech and health tech sectors.

Speaking on “Startup Procurement: The Kerala Model,” Jyothilal said a liberal approach is important in matters like registration and extending financial aid to them. “Scaling up and funding has to be addressed in a holistic manner. This summit, which is the first-of-its-kind in the country, can find technology solutions for the benefit of society,” he added. As many as 100 promising startups are participating in the summit, to which 32 government departments have sent their representatives.

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