Karnataka’s new procurement policy aims to give slice of government business to startups

Karnataka is working on a procurement policy that will require government departments and bodies to also source from startups.

“This is going to be a game-changer policy for the entire startup ecosystem,” IT/BT Minister Priyank Kharge said, inaugurating an event to plan strategies to take Karnataka towards building a $ 1 trillion economy.

The event was organised by the FICCI in collaboration with the state government’s Planning & Statistics department. “If you want to scale up, the government would be a partner,” the minister said.


The government was framing the rules, which should be out in about a month, he later told mediapersons.

The government has not decided on the share of procurement that should go to startups, but it’s speculated that the figure may be set at 5%. The opportunity would be available to startups registered with the state government, and it would include both goods and services that government departments or other arms of the government would buy, Kharge said.

The policy was being designed in a way that would help startups, the minister said, explaining that startups, being small, lacked scale to respond to large government orders. A 5% share, for example, in a procurement size of say about Rs 10,000 crore, was still very large for startups, he said.