Some of the biggest names in India’s startup and technology ecosystem will be part of a committee that the government is forming to advise on reforms to further boost the country’s fast-growing digital economy and remove longstanding roadblocks.
Ride-hailing firm Ola founder Bhavish Aggarwal, ed-tech platform Byju’s founder Byju Raveendran, Infosys cofounders Nandan Nilekani and Kris Gopalakrishnan, and a number of global and home-grown venture capital investors, including Siddarth Pai, the founding partner of 3one4 Capital, are expected to be part of the Startup Advisory Council, people who were briefed on the developments told ET.
The Council will also be represented by government officials and regulators, they said. “It was felt that there should be a structured way in which the government engages with startups at regular intervals. So, we’re arranging the concerned people who deal with startups from the relevant ministries, people from the startup ecosystem — be it entrepreneurs, investors and thought leaders,” a senior government official told ET on condition of anonymity.
First Meeting Likely Before Budget
Aggarwal, Raveendran, Gopalakrishnan and Nilekani did not respond to emails till press time. Pai declined to comment. The decision to create the council was discussed at the 2019 Global Venture Capital Summit, organised by the Department for Promotion of Industry and Internal Trade (DPIIT) and the Goa government last month, one of the people told ET.
A number of closed-door meetings were held between industry representatives and policymakers at the second edition of the two-day summit, the sources said, where the industry veterans had listed out their requirements from the lawmakers.
ET reported last month that India’s private equity and venture capital industry had urged domestic pension funds to allocate 1% of their overall assets to alternative investment funds and proposed the creation of multiple startup-focused fund-of-funds backed by the government, to channel such investments.
Govt plans advisory body for startups
The Indian Venture Capital Association (IVCA), the nodal body representing the sector which mooted the idea, is also seeking tax breaks as incentives to create such pools of domestic capital.
The first meeting of the council is expected to take place before the upcoming Union Budget, where issues plaguing the startup sector are likely to be tabled.
Key among these will be providing investors exemption from capital gains tax, to promote redeployment of capital into startups and taxing of employee stock ownership plans (Esops) only at the time of sale rather than when the shares are vested.
The move to create a Startup Advisory Council is also in sync with the DPIIT’s Startup India Vision 2024, which has proposed significant cuts in compliance time for startups and to ease regulatory requirements for entrepreneurs.
The vision document also envisages several measures to boost startups, including setting up 500 incubators and accelerators, creating better facilities for debt financing and deploying the entire corpus of Rs 10,000 crore fund-of-funds.
ET reported on December 27 that DPIIT was also in talks with the finance and corporate affairs ministries, the Sebi and the RBI over a plethora of regulatory changes covering startups.
“We are working on regulatory changes that would aim at easier incorporation of a company, easier compliances, reduction of tax compliance to less than one hour per month,” DPIIT secretary Guruprasad Mohapatra had told