GS Paper - 3 (Economy)

The government has incorporated the definition of ‘start-up’ in its procurement process for consultancy and other services. The Department for Promotion of Industry and Internal Trade (DPIIT) has amended the definition of ‘start-up’. It has, therefore, been decided to partially modify… the Manual for Procurement of Consultancy & Other Services, 2017, the expenditure department said in an office memorandum (OM).


  1. On 19 February 2019, the DPIIT amended the definition, as per which an entity will be considered a ‘start-up’ up to a period of 10 years from the date of incorporation/registration and if its turnover for any of the financial years since incorporation/registration does not exceed Rs 100 crore.
  2. In the OM, the expenditure department said the condition of prior turnover and prior experience may be relaxed for start-ups (as defined by DPIIT) subject to meeting of the quality and technical specifications.
  3. The quality and technical parameters are not to be diluted, the finance ministry said.
  4. An entity will be recognised as a startup for up to 10 years of existence and up to Rs 100 crore of turnover. Earlier, the existence period was five years and the turnover limit was Rs 25 crore.
  5. Another change is that a start-up should be “working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation”.
  6. The earlier requirement was that it should be “working towards innovation, deployment of commercialisation of new products, processes or services driven by technology or intellectual property”.