Karnataka to allow startups to pitch for government contracts

CM Siddaramaiah is encouraging the initiative to create more startups and generate new jobs across the state

Karnataka plans to become the first state in the country to allow startups to pitch for local government contracts, a move that could potentially revolutionise procurement for government agencies by bringing down costs and access to new technology solutions.

The move called ‘the startup forum’, a collective of new enterprises across technology, manufacturing and services could pitch directly for government orders and execute them within the set cost and timelines.

“The move is a way to showcase innovation of colleges and others at the grass root levels. The startups, on the other hand, will benefit from the government, which is a very big buyer,” T V Mohandas Pai, Chairman of Manipal Global Education and an advisor to the Karnataka’s start-up policy.

Typically, government purchases follow protocols that mandate suppliers to either have a minimum threshold for revenue or have a three-year track record.

“Because of the existing government policies, it is very difficult for them (governments) to tap into innovative solutions. Often, they are shut out from the innovative ideas to fix their issues,” said Pai.

Karnataka’s information technology and biotechnology director Tanusree Deb Barma said that the framework for the start-up forum is ready.

Karnataka, whose capital is Bengaluru, the world’s fastest growing start-up hub, earlier this week said it would look at aiding create 20,000 tech startups by 2020 and there by create 600,000 direct and 1.2 million indirect new jobs. Chief Minister Siddaramaiah is driving the initiative to create more start-ups and generate new jobs across the state.

“A start-up council under my chairmanship will review the implementation of startup policy on a regular basis,” Siddaramaiah said.  The state has set up a start-up policy that also envisages a fund of funds for early stage funding of technology startups.

Pai, who also advises Rajasthan and West Bengal governments on start-ups, said the move by Karnataka will enable these startups to get better access to capital and clients.

“Karnataka and Rajasthan governments are way ahead of the central government in supporting the startup culture in the country,” he said.

Karnataka has been one of the most active and competitive ones when it comes to promoting the startup ecosystem. The government has partnered with 91springboard, a startup co-working space and incubator, on a public-private partnership basis. 91springboard, which has presence in Delhi and Gurgaon, is in the last leg of setting up its start-up space in Bengaluru.

Karnataka has set up a semiconductor and biotechnology venture funds of Rs 100 crore and Rs 50 crore, respectively, to help startups in those segments. It is also looking to soon open a centre of excellence on mobile applications with the help of IAMAI and Google.

Start off on the right foot

* Bangalore is 15th among the Global Startup Ecosystem Ranking

* At 4x growth rate, the city was one of the top ecosystems with the most number of VC fundings during 2013-14

* It is ranked sixth in terms of the number of fundings during 2013-14 globally

* Bengaluru is hub to almost a third of the country’s start-ups

* India had 3,100 start-ups at the end of 2014 and that number will cross 4,200 by the end-2015