Saturday, 22 October 2016

Finally , some URJA from URJIT ?


Business India ( 21 Oct 2016 ) carries following news :
" Foreign VCs can now invest in unlisted firms sans RBI nod "

" Foreign venture capital entities can now invest in unlisted Indian companies without Reserve Bank of India approval.
The venture capital firm will, however, have to be registered with market regulator SEBI. The investment can be made in an Indian company in 10 specific sectors or in any start-up.


The central bank on Thursday amended the regulations governing foreign venture capital investors (FVCI) in order to further liberalise and rationalise the investment regime and to give a fillip to foreign investment in start-ups.


FVCIs can also invest in EQUITY , EQUITY-LINKED INSTRUMENTS or DEBT INSTRUMENTS issued by an Indian ‘start-up’ irrespective of the sector in which it is engaged.


The RBI said a start-up will mean an entity (private limited company, registered partnership firm or a limited liability partnership) incorporated or registered in India not prior to five years, with an annual turnover not exceeding 25 crore in any preceding financial year.


The consideration for all investments by an FVCI can be paid out of  INWARD REMITTANCE FROM ABROAD through normal banking channels or OUT OF SALE / MATURITY PROCEEDS  or INCOME GENERATED FROM INVESTMENTS  ALREADY  MADE .


There will be NO RESTRICTION ON  TRANSFER OF ANY SECURITY / INSTRUMENT HELD BY THE FVCI,  to any person resident in or outside India "


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Congratulations , Shri Urjit Patel ,


For this wonderful - though small - return gift to the nation on your upcoming 53rd birthday ( 28 Oct )

But I believe , you are a man in a hurry - and not constrained by " incremental " ideology !

You are , no doubt aware that in past one year since launch of " Start Up India " initiative , only 5 start ups have qualified for that elusive 3 year tax holiday condition !  In a country that boasts of 4200 Start Ups !



What is holding you back from implementing , the  REST OF MY SUGGESTIONS  in the following blog ( sent as email to NDA ministers on 16 Jan 2016 ) ?


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TEN MILLION START- UPS IN ONE YEAR ?


Thank you , Narendrabhai , for the Start Up Action Plan announced last evening


I am glad that some of my suggestions ( sent to Ministers / Secretaries ) over the past 2 years , have been incorporated in the  ACTION PLAN , in respect of :

*    Self Certification

*    Simplified Registration thru Mobile App

*    Tax Exemption for Capital Gains

*    Entrepreneurship Program for 10 lakh students 


*    No Corporate Income Tax for 3 years

    
 You will find my detailed suggestions covering these points in following blogs  :


            {  http://myblogepage.blogspot.in/2015/09/a-new-economic-order.html   }




           {  http://myblogepage.blogspot.in/2015/09/from-job-seekers-to-job-creators.html  }












           {  http://myblogepage.blogspot.in/2015/12/creating-jobs-vs-creating-self-employed.html  }




           {   http://myblogepage.blogspot.in/2015/12/get-out-of-way.html    }




          {   http://myblogepage.blogspot.in/2015/10/ten-million-entrepreneurs.html   }




           {   http://myblogepage.blogspot.in/2015/10/start-up-eco-systems-usa-vs-india.html  }




           {  http://myblogepage.blogspot.in/2015/09/treading-beaten-path.html   }



 
           {   http://myblogepage.blogspot.in/2015/09/second-industrial-revolution.html   }




           {   http://myblogepage.blogspot.in/2015/09/from-single-window-to-single-day.html   }




           {   http://myblogepage.blogspot.in/2015/09/myth-of-job-creation.html   }




          {  http://myblogepage.blogspot.in/2015/09/killing-many-birds-with-one-stone.html  }




         {   http://myblogepage.blogspot.in/2015/07/if-mohamed-cannot-go-to-mountain.html   }




         {   http://myblogepage.blogspot.in/2015/12/ditch-historical-baggage.html   }




         {  http://myblogepage.blogspot.in/2015/02/create-self-employment.html  }




Very likely , your initiative may see the birth of ten thousand new start-ups in 2016-17, which , together , might generate one lakh jobs

In itself, this will bring a new dynamism to India's Economy 

But that will still fall far short of 12 Million ( 120 lakh ) youth joining the work-force each year

Can all of these youth become Start Ups ?

It is entirely possible

All you need to do is to implement my following suggestion :


SUGGESTION

    *  Although all Start Ups will need to file annual Income Tax returns ( with full disclosure of income / expenses / profits / sources of funds etc ) , it will NOT BE  REQUIRED  TO  PAY  ANY  CORPORATE  INCOME  TAX FOR  THE FIRST  10  YEARS  OF  ITS  EXISTENCE


     *  A Start Up will be free to  RAISE  FUNDS  FROM ANY SOURCE 

        ( Individuals  /  Companies  /  PE funds  /  VCs  /  Angel Investors  /  Religious Trusts  etc )


         
     *  100 % FDI  will be permitted in Start Ups


     *  A Start Up can receive  LOANS  or  EQUITY  and be able to accept  FIXED  DEPOSITS .
        It can also GIVE LOANS to individuals or other Start Ups or INVEST IN  OTHER  START-UPS  by way of equity



    *  There will be NO  RESTRICTIONS on what INTEREST  ( on Loans / FDs ) that a Start Up may pay nor
        any  RESTRICTIONS  ON  DIVIDENDS  it may declare

        THE  DIVIDENDS  DECLARED  BY  START UPS  WILL  NOT  ATTRACT  ANY  INCOME  TAX



    *  As far as the persons / companies etc providing funds to Start Ups ( by way of loans or equity ) is concerned,
       NO  QUESTIONS  WILL  BE  ASKED  RE  THEIR  SOURCE  OF  FUNDS





   WHAT  WILL   HAPPEN , IF  IMPLEMENTED  ?



   *  Billions of rupees worth Black Money will flow into these Start Ups - money which is currently lying unutilized
       or locked up in unproductive assets


       
    *  Within 3 months , thousands of Venture Capital Funds will be born , exclusively for funding of Start Ups ( You
        know who will set up these VCs ! )


    *  With NO Income Tax to be paid , Start Ups will conduct all transactions through cheques ( receipts /
        payments )


    *  GST  collections will go up


    *  Domestic Savings Rate will go up


    *  Since millions of ( Black Money holding ) individuals / businesses will come forward to fund these Start Ups ,
       lending pressure on banks will go down 
  

   *  Who knows , Start Ups may get into the business of Assets Reconstruction and relieve banks of NPAs !


    *  With locally / domestically stashed Black Money flowing into the economy , our dependence on FDI will go
        down


    Corruption will decline drastically



Dear Shri Narendrabhai :


It is still not late to incorporate my suggestion in forthcoming Union Budget on 29 Feb 2016


This is your opportunity to ,

*   Dream BIG

*   Enable millions to dream big

*   Unleash the Entrepreneurial Genome of India's Youth

*   Make 21st Century , an Indian Century  

*   notwithstanding the opposition in Rajya Sabha


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23  Oct  2016

www.hemenparekh.in / blogs






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