In a bid to offer easy access to capital for upcoming entrepreneurs the Indian government has suggested that it will hold talks with pension and insurance fund regulators to invest in the startup ecosystem.
Talking about the development, Ramesh Abhishek, secretary, Department of Industrial Policy and Promotion (DIPP) said, “We would want them to invest in venture capital funds and startups…They have their own procedures and risk assessments to follow and rightly so.”
In a meeting held on January 9, 2017, with the DIPP, incubators and accelerators raised issues regarding access to funds and seed capital for startups as well as tax related benefits. “There is work to be done. They have asked for some recognition for startup builders,” said Nirmala Sitharaman, Minister of Commerce and Industry. Incubators have asked the DIPP to provide grants, which can be used in providing seed funding to the startups.
The DIPP invited feedback and suggestions from the incubators on the Start-up India Action plan as well. In addition, it will organise a meeting between the Small Industries Development Bank of India, venture capital firms, and incubators to address the difficulties in accessing capital through the INR 10,000 Cr fund of funds.
The said meeting will be held on February 20, 2017. DIPP will also look into old laws which need revisiting such as the Societies Act of 1860.
Earlier in October 2016, the DIPP proposed to set up a Credit Guarantee Fund with a corpus of $300 Mn (INR 2,000 Cr) to promote entrepreneurship. Earlier this week, it was reported that the DIPP is reportedly formulating a new set of tax concessions on employee stock options, unlisted securities, and convertible instruments. The latest Union Budget is expected to be announced on February 1, 2017.
(The development was reported by ET.)