PM Modi's Silicon Valley Visit Will Benefit Startups

BENGALURU: Adding to the plethora of expectations from Prime Minister Narendra Modi’s visit, ET reports that PM Modi is expected to announce long-awaited policy fixes aimed at making it easier to build, invest in, and shut down startups in India. Prime Minister has supposedly sought a list of issues and possible solutions from some key representatives in the startup sector.

Official states that, “"The PMO has indicated that the prime minister would announce decisions on a few items while he is here. We don't know yet what it would be. The push is on capital gains tax.” However, the wish list has about 10 items, with investor friendly policies being given the top priority, to make it easier for investors to back Indian startups either by abolishing capital gains tax on profits from startup investing or keeping the rate low. The initiative is strongly backed by venture capital investors based in Silicon Valley, as since 2013, venture capital funds have invested $6.3 billion (Rs 40,000 crore) in Indian startups. They indeed played a key role in helping establish India as one of the world's prominent hubs for entrepreneurship. Other wishes include a reduction in the compliance burden, elimination of discrimination in public procurement and making share swaps non-taxable.

As per the PM’s itinerary, the policy announcements regarding Indian startups are likely to be made during the 'Start-up Konnect' event, co-hosted by The Indus Entrepreneurs (TiE) and software industry grouping Nasscom. Reportedly, Start-up Konnect is one of the three major, engagements for Modi in Silicon Valley will be graced by e-commerce and startup giants in present Indian market like, Snapdeal, Zomato, Paytm, and InMobi including venture capitalists and angel investors of Indian origin based in the Bay area, including Kanwal Rekhi, Raju Reddy and Vinod Khosla.

Vikas Swarup, the external affairs ministry spokesman, reflected with a clear picture saying that, "Startups, innovation and manufacturing are the thrust areas of this visit.”

However, those lobbying for the policy reform are of the opinion that in spite of a successful exit from a startup there is no certainty over how much tax should be paid and how long the assessment will take. "We are hoping that there will be some policy announcements; they are just very long overdue," said Sharad Sharma, cofounder of software products think tank iSPIRT.
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