Venture capitalists disappointed over budget
Thursday, 01 March 2007, 18:30 IST
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New Delhi: Criticising the budget 2007-08 for imposing tax on venture capital funds, leading players in the segment say the move will impact flow of foreign equity into India. Taking away of the pass-through status from the venture capital funds in non-specified areas will "cause irreparable harm to innovation and entrepreneurship in India and seriously discourage the growth of venture capital in India", the Indian Venture Capital Association (IVCA), an apex association of venture capitalists, said on Thursday. Venture capital funds that make investments in business start-ups for various industries will not be able to take the advantage of the growing economy, IVCA said reacting to the budget presented by Finance Minister P. Chidambaram. According to the association, the government should have specified the areas where the pass-through status is not allowed. "This list has some obvious, inexplicable exclusion such as telecom, value added services in the wireless arena, media, etc. But the main point is that no one, certainly not the government, is competent to draw up a list of what are the promising areas of tomorrow," the IVCA said in a statement. According to IVCA chairman Saurabh Srivastava: "Nowhere in the world does government seek to be clairvoyant and direct in which areas of innovation venture capital is allowed to operate. This is an issue best left to entrepreneurs and people who are willing to invest in them. "We feel that the current proposals are regressive and retrograde and must be dropped," he said.
Source: IANS
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