Government set up startup advisory council with eminent venture capitalists

A committee or a startup advisory council set up would provide measures for boosting the startup ecosystem and the digital economy. The advisory council would consist of home-grown venture capitalists as members. Some of them include Infosys co-founders Nandan Nilekani and Kris Gopalakrishnan, Byju’s founder, Byju Raveendran and the founding partner of 3one4 Capital, Siddarth Pai. The council would also include a representative of the government and regulatory authority.

The purpose of the council is to have a continuous dialogue between the startups and the government. The decision to create the council was taken in the 2019 Global Venture Capital Summit, organised by the Department for Promotion of Industry and Internal Trade (DPIIT) and the Government of Goa. The council aims to be a comprehensive body consisting of significant stakeholders of the startup ecosystem.

The council expects to hold its first meeting before the upcoming Budget of 2020. 

Also Read: FinMin Says Issues Will Be Addressed Within Budget Session

The Indian Venture Capital Association (IVCA), the apex body representing the startup ecosystem also seeks tax breaks to create pools of domestic capital. The tax breaks include exemption from tax on capital gains upon redeployment of funds into startups, taxation of employee stock option plans only at the time of sale as against vesting.

The DPIIT’s Startup India Vision 2024 has requested significant cuts in time spent on compliances by startups and easing of regulatory requirements for entrepreneurs. The other measures include establishing 500 incubators and accelerators, providing better facilities for debt financing and investing the entire corpus of Rs 10,000 crore fund-of-funds into the startup ecosystem. 

The DPIIT is seeking a lot of regulatory changes from the finance and corporate affairs ministry, the SEBI and RBI. Some of the changes sought include easy incorporation of a company, ease of compliance and reduction in compliance times to one hour per month.

For any clarifications/feedback on the topic, please contact the writer at sweta.dugar@cleartax.in

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