Centre is planning policy changes to energise one of PM Modi's initiatives ‘Startup India’, to include a bigger number of startups under the 'medium industry' category that would be suitable for public procurement incentive and preferential benefits.
As per ‘The Economic Times’ report, under the public procurement policy, government department and ministries and its PSUs have to obtain at least 20 percent of their purchases from micro and small enterprises beginning April 1 last year.
This means that marginally bigger startups may miss out on this advantage that could be their initial survival.
The paper quoted a government official as saying that governing policy in the matter includes only small and micro enterprises and does not mention medium industry.
Ways are being figured out to make it part of the policy without breaking the legal framework, he added.
According to the Micro Small and Medium Enterprises (MSME) Act, a medium enterprise should have investment of not less than Rs 5 crore and not exceeding Rs 10 crore in equipment if it operates in manufacturing space.
Industrial Policy and Promotion department is in talks with department of expenditure and MSME ministry officials for a clarification so that the benefits announced in the Startup India action plan can be provided to such medium industry as well.