Start-ups recommend policies for India’s new leader

 

Photo courtesy of Economic Times

Photo courtesy of Economic Times

NEW DELHI/BANGALORE/MUMBAI: India’s burgeoning startup sector has drawn up a long wish list for the attention of Prime Minister Narendra Modi, with demands ranging from clarity on regulatory policy to uniform taxation across the country. High on the list is a demand for 100% foreign direct investment (FDI) for the fast-growing online retail industry and education firms, and tax breaks for angel investors. 

In the policy space, taxation in its various forms features prominently. “The new government should simplify and standardise state taxation to enable seamless e-commerce,” says Kunal Bahl, CEO of online marketplace Snapdeal. “They should also open new incubators that provide free office space and connectivity to startups.”The goods and services tax (GST) is another tax topic, and the $3 billion Indian e-commerce industry wants faster implementation of this legislation. “GST is the number one thing that will reduce red tape, paperwork and encourage e-commerce logistics in India,” says Sanjiv Kathuria, CEO of DTDC DotZot, a year-old elogistics firm that expects to triple its revenues to Rs 45 crore next year. 

“There should be no more tax terrorism. Unpredictability is what hurts investors most,” adds Bharti Jacob, partner at SeedFund, which has invested in startups such as Carwale, RedBus and Printo. Indian entrepreneurs also believe sops to encourage local enterprise will be crucial to build India’s software product industry. “There should be incentives to buy locally-made software products,” says Aneesh Reddy, 29, CEO of Bangalore-based Capillary Technologies, which makes software to help retailers understand customer behaviour. Adds Sharad Sharma, cofounder of software products think-tank iSpirit: “Presently, software products are unfairly taxed as both goods and services. We will present a solution for this issue to the new government shortly. 

Property portals such as Commonfloor and Housing expect a revival of the property market with the setting up of a regulator for the realty sector. “We expect faster approvals and easier bank funding,” says Advitiya Sharma, 23, cofounder of Housing.com. Investors feel the spurt in share prices and the strong sentiment will help them record much-needed exits from portfolio companies. “There will be a short window in the next six to 12 months, where we will see a flurry of IPOs,” says Mahendra Swarup, managing director, Avigo Capital

“If the new government does perform as per expectations, there is a possibility that private equity investors could raise between $25 billion and $30 billion over the next 36 months.” About $60 billion has been invested in India over the last 10 years, but which is still to be returned to investors. Promod Haque, senior managing director of Silicon Valley investment firm Norwest Venture Partners, says his fund, which recently raised a global corpus of $1.2 billion, “will invest a significant portion in India.” In the startup space, expectations are running high.

Editor’s Note:  This article was published by the Economic Times on May 27, 2014.  You can read the original article and more at: 
http://economictimes.indiatimes.com/articleshow/35624661.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

 

 

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