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The Centre has constituted a six-member expert committee under the Chairmanship of former SEBI Chairman M Damodaran to suggest measures for scaling up of venture capital and private equity (VC/PE) investments.
This move is an implementation of an announcement made by the Finance Minister Nirmala Sitharaman in her budget speech this year. She had announced that an expert committee would be set up to examine and suggest appropriate measures to address regulatory and other issues to enable scaling up investments by venture capital and private equity investments.
Besides Damodaran, who will Chair this Panel, the other members of this Expert Committee are G Mahalingam, former Wholetime Member SEBI and ED of RBI; D P Nagendra Kumar, former Member (GST), CBIC; Ashish Verma, Former Principal Commissioner of Income Tax; Poonam Gupta, Director General, NCAER and Prabhat Ranjan Acharya, Director AJNIFM.
The committee has been tasked to “comprehensively study, using a systems approach, the end-to-end frictions and potential accelerants from regulatory policy and taxation to facilitate ease of investing, as well as to encourage investments in India”.
The panel will also review issues, compliances and suggest simplifications and changes” for further accelerating the growth of alternative capital to participate in the VC/PE industry, said a circular issued by the Finance Ministry.
The Expert Committee has also been asked to suggest measures to “further accelerate investments into start-ups and sunrise sectors”, and to suggest “forward looking measures and future ready regulatory practices”, in addition to studying and emulating global best practices.
The Finance Ministry move to set up this expert committee comes at a time when PE/VC investments have fallen to a 19 month low of $ 2.2 billion in August 2022. In July this year, PE/VC investments stood at $ 4.1 billion, according to a EY-IVCA report. In August 2021, the quantum of PE/VC investment flows stood at $ 11.2 billion, this report showed.
The year 2021 saw a record PE/VC investment inflows of over $70 billion.
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