Dear Sir,
As a representative of the Indian Venture Capitalist Association (IVCA), India's premier PE/VC body, my wish list to the Finance Minister for the Budget 2009 is as follows:
- Approval process for seeking registration as an FVCI should be hastened. The restrictions on select areas of investments should be removed as it discourages foreign investment in India.
- Tax pass through for domestic venture capitalists should not be restricted to the few identified sectors.
- Threshold value ascribed to Open Offers under the Takeover Code, i.e. 15%, is very low and becomes a major impediment for private equity investors.
- The risk weight-age allocated to investments into VCFs should be reduced. Further, investments by banks or their subsidiaries into VCFs should not be counted under the capital markets ceiling.
- The delisting process should be simplified and SEBI should set prudent timelines in delisting guidelines for a panel to take decision.
- A new Press Note should be issued to bring uniformity, consistency and homogeneity in the computation of indirect foreign investments.
- A new Press Note should be issued clarifying that NBFCs engaged in microfinance activities are not subject to Press Note 4 (2009). Separately, the prescribed minimum foreign investment requirement for NBFCs (US$ 0.5 million) should be reduced for those engaged in microfinance activities.
- Tax regime for assessing LLPs should be resolved at the earliest.
- Policy on allowing finances for domestic acquisitions should be liberalized.
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