Karnataka's "Startup First" Initiative for Govt Contracts Under PMA

The Karnataka government has unveiled an ambitious initiative to bolster the state's entrepreneurial ecosystem by empaneling 100 startups under the Preferential Market Access (PMA) scheme. This effort aims to make the government the first customer for these startups, encouraging state departments and public sector units to procure their innovative products and services.

The second EOI for startup empanelment was launched on June 20, 2024, and will remain open till August 5, 2024. 

Understanding Karnataka PMA

The PMA scheme is a strategic framework developed to promote the growth of startups by facilitating public procurement from these young enterprises. Over the past decade, startups have significantly contributed to various sectors, including health, transport, security, and education, by offering novel solutions and services. Recognizing the importance of fostering this ecosystem, the Government of Karnataka amended the Karnataka Transparency in Public Procurements Rules, 2000, to encourage procurement from startups.

The Karnataka PMA framework aims to enhance the startup ecosystem by providing general relaxations in public procurement, value-based preferential procurement, and a startup inclusion plan in tenders. Key features include the elimination of the earnest money deposit (EMD) requirement for startups during the tendering process and a value-based procurement model allowing limited tenders up to Rs 50 lakhs exclusively for empanelled startups.

Eligible Startups and Sectors

According to a report in MoneyControl, following the first Expression of Interest (EoI) called between December 2023 and January 2024, nine startups have been empanelled. These include:

• TeckKshetra Infosolutions Pvt Ltd: Online exam solutions, AI-based face recognition.
• Trashcon Labs Pvt Ltd: Solid waste management.
• eReleGo Technologies Pvt Ltd: Digital marketing services.
• Reverse Engineering Infosec: Cybersecurity solutions.
• Hanle Solutions Pvt Ltd: Digital marketing services.
• Fynamics Techno Solutions Pvt Ltd: Digital platforms for financial transactions.
• Sentienz Solutions Pvt Ltd: IoT-based energy services.
• Anabio Technologies Pvt Ltd: Biodegradable sanitary pads.
• Elpis Energy Solutions Pvt Ltd: Solar energy solutions.

According to the official notification, in 2021, the state identified 12 sectors eligible for procurement under PMA, including healthcare, agriculture, manufacturing, cleantech, marketing, finance, human resources, energy, operations, smart cities, renewable and circular economy, and other emerging technologies.

How Startups Can Request Selection under PMA

Startups interested in being empaneled under PMA scheme can follow these steps:

1. Create an Account: Register with Startup Karnataka by providing basic details of the applicant and the startup.
2. PMA Section: Visit the Startup Portal to access the Preferential Market Access section. Select Preferential Market Access from the dropdown menu.
3. Understand PMA Support: Familiarize yourself with all the state supports under PMA, including eligibility criteria and the support provided.
4. Submit Request: View the Government Order, visit the partner web portal, and submit a grievance on the partner web portal for Preferential Market Access.

Once the form is submitted, the Startup Karnataka Team will connect the startup to the relevant request after assessing the problem and determining the necessary support.

Benefits and Opportunities for Startups

Empanelled startups receive numerous benefits, such as exemptions from pre-qualification criteria like prior turnover and experience for tenders under Rs 20 lakh if established within three years. For tenders exceeding Rs 20 lakh, there is a 50 percent reduction in these criteria. This provides startups with opportunities to engage with various government departments, helping them access the Karnataka market and foster growth through government support.

Additionally, the Karnataka Innovation and Technology Society (KITS) is developing an online platform named Propel. This platform aims to accelerate the adoption of startup solutions by connecting startups with tech MNCs, GCCs, GIA partners, and other entities. Propel will facilitate partnerships between startups, industries, and government departments, offering a direct avenue for startups to showcase their solutions to potential customers.

The Karnataka government's plan to empanel startups under PMA is currently in its pilot phase. The success of this phase will determine the program's expansion. By promoting public procurement from startups, the government aims to create a competitive marketplace that fosters innovation and entrepreneurship. This initiative not only provides efficient solutions for government challenges but also generates employment opportunities, contributing to the overall economic growth of the state.

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