Patna: In a major push to promote startups and local enterprises, the Bihar government has implemented the ‘Bihar Purchase Preference Policy 2026’ with immediate effect, offering significant relaxations in government procurement norms and expanding market access for emerging businesses.
According to a notification issued by the Finance Department, startups will now be eligible to receive government work orders of up to Rs 10 lakh without participating in a tender process. Additionally, procurement contracts worth up to Rs 25 lakh will be reserved exclusively for startups through limited tendering, effectively restricting participation to Bihar-based entities.
The policy also introduces sweeping relaxations in eligibility criteria for local enterprises. Experience and turnover requirements have been reduced by 50 percent. For instance, if a tender earlier required 10 years of experience, Bihar-based companies will now need only five years. Similarly, the annual turnover requirement of Rs 1 crore has been lowered to Rs 50 lakh. Local firms have also been exempted from submitting security deposits while applying for tenders.
To further streamline procurement, departmental secretaries have been granted special financial powers. They can directly nominate a startup and award contracts of up to Rs 10 lakh annually. However, the total value of such direct allocations within a department cannot exceed Rs 50 lakh in a financial year.
The policy includes accountability provisions as well. Any unit that fails to deliver supplies without valid reasons after securing a contract will face strict action under the Bihar Financial Rules. At the same time, performance security requirements for Bihar-based enterprises have been reduced by half.
Officials said the move aims to boost investment, encourage entrepreneurship, and generate employment at the local level. It is also being seen as a key reform to improve the ease of doing business in the state, as startups previously struggled to qualify for government tenders due to stringent experience and turnover conditions.
Key highlights of the policy
Startups can receive direct government work orders of up to Rs 10 lakh annually through nomination by departmental secretaries, with a cap of Rs 50 lakh per department per year.
Procurement contracts up to Rs 25 lakh will be issued through limited tenders restricted to Bihar-based startups.
Local enterprises will receive a 50 percent relaxation in experience and turnover requirements.
Bihar-based firms are exempt from depositing security money while applying for tenders.
The definition of ‘local enterprise’ includes all industrial units and startups based in Bihar, provided they meet quality standards and are not blacklisted by the government.
The policy is expected to open up government procurement opportunities for startups and strengthen the state’s industrial ecosystem by ensuring a steady demand pipeline for local businesses.
