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.com/2015/09/a-new-economic-order.html }
{ http://myblogepage.blogspot.com/2015/09/from-job-seekers-to-job-creators.html }
{ http://myblogepage.blogspot.com/2015/12/creating-jobs-vs-creating-self-employed.html }
{ http://myblogepage.blogspot.com/2015/12/get-out-of-way.html }
{ http://myblogepage.blogspot.com/2015/10/ten-million-entrepreneurs.html }
{ http://myblogepage.blogspot.com/2015/10/start-up-eco-systems-usa-vs-india.html }
{ http://myblogepage.blogspot.com/2015/09/treading-beaten-path.html }
{ http://myblogepage.blogspot.com/2015/09/second-industrial-revolution.html }
{ http://myblogepage.blogspot.com/2015/09/from-single-window-to-single-day.html }
{ http://myblogepage.blogspot.com/2015/09/myth-of-job-creation.html }
{ http://myblogepage.blogspot.com/2015/09/killing-many-birds-with-one-stone.html }
{ http://myblogepage.blogspot.com/2015/07/if-mohamed-cannot-go-to-mountain.html }
{ http://myblogepage.blogspot.com/2015/12/ditch-historical-baggage.html }
{ http://myblogepage.blogspot.com/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