According to people who were present during the closed door meeting between bureaucrats and a handful of American investors of Indian origin along with representatives of Nasscom, the Indus Entrepreneurs (TiE), it was mentioned that New Delhi is pushing for startups to have no interaction with the government -- including no tax filing --for at least 5 years or until they reach a certain revenue turnover.
“They want the government to get out and make it easy for startups to get started and avoid taxes,” said one of the officials privy to the development. Amitabh Kant, secretary, department of industrial policy and promotion (DIPP), K VijayRaghavan, secretary of department of Biotechnology, and Hemang Jani, officer of special duty in the Prime Minister’s Office were present during the meeting. DIPP has been given the mandate of the Start-up mission which was announced by Modi in August. Kant is said to have told the gathering that the mission will be formally launched in December and has invited startup champions in the Valley for its inauguration. He is also learnt to have said that the definition of a startup has been finalised and will be shared with the community for comments.
There was a lot of discussion on the issue of capital gains tax, which has been long pending issue with the investor community. While the investors asked the government to consider making it zero capital gains for 10-20 years to encourage reinvesting, the discussion indicated that capital gains could be avoided by reinvesting the profits within a notified period of time. Venkatesh Shukla. President of TiE Silicon Valley said that Modi was quite emphatic towards the ecosystem and was looking for recommendations and guidance on how to make it happen. “He seemed committed to remove cobwebs and obstacles in the way of the start-up ecosystem… we had a long conversation about bankruptcy law, making taxes less onerous etc., but conceptual agreement needs to be translated into specific action items,” Shukla who was present during the meeting told ETover the phone.
Among a host of other measures, Kant also mentioned that the Bankruptcy law is being worked on by the Vishwanath committee and will be ready for comments in 2 weeks. Removal or relaxation of permanent establishment requirements could be one way to address the issues with venture capital and the government has solicited the help of the industry to find a solution to fix this issue in the Companies Act.
Sudhir Sethi, managing partner, IDG Ventures and head of the iSPIRT list-in-India policy expert team said all the focus on startups by the government is moot if successful tech startups don't stay in India. “The number of funded tech startups redomiciling from India to Singapore or US has grown from 54% in 2014 to 75% this year. This exodus is a crisis that needs urgent attention,” he added.
Though they did not make any specific announcement, the proposals are a lot more reassuring that before, said the first official quoted above.
Nearly 40 startups from India and tech luminaries like LinkedIn’s cofounder Reid Hoffman attended the Startup Konnect event organized by India’s IT lobby Nasscom and TiE in San Jose. While launching the Bharat fund, Modi said, “I am honoured to launch the BHARAT Fund today – which stands not just for India, but also for Better Health, Agriculture, Renewable and Technologies.” A day ago, Chip maker Qualcomm Incorporated announced a $150 million fund to invest in Indian startups. Kant could not be immediately reached for a comment.
Jayadevan PK is in Menlo Park at the invitation of Facebook.
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5 Comments on this Story
saranathan Lakshminarasimhan1939 days ago
it is a right scheme for the right time
kaparrama1940 days ago
Its heartening to see that these non stop conspiracies of looterri mattajji sonniyya and her gang of slave scamgressi daccoitts like land maffios, virbhadra sink,haris rawwat,siddaravan,hoodda,gahhlot,goggoi etc. is not able to halt the vikas rath of namo giving massive heartburns to these sikkullar looterras!
Ranganathanla 1940 days ago
Future is bright