Indian Venture Capitalist Association's expectations from Budget 2009

 

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:

1. 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.
2. Tax pass through for domestic venture capitalists should not be restricted to the few identified sectors.
3. 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.
4. 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.
5. The delisting process should be simplified and SEBI should set prudent timelines in delisting guidelines for a panel to take decision.
6. A new Press Note should be issued to bring uniformity, consistency and homogeneity in the computation of indirect foreign investments.
7. 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.
8. Tax regime for assessing LLPs should be resolved at the earliest.
9. Policy on allowing finances for domestic acquisitions should be liberalized.

Best Regards

 

Mahendra Swarup

President, Indian Venture Capital Association