Finance Ministry sets up panel to address issues faced by venture capital, PE firms

The Finance Ministry has set up a high-level panel headed by former Sebi chairman M Damodaran to look into issues being faced by venture capital (VC) and private equity (PE) investors.

The six-member committee will suggest steps for scaling up investment by VC and PE funds.

Finance Minister Nirmala Sitharaman in Budget 2022-23 had announced setting up of an expert committee to examine and suggest appropriate measures related to venture capital and private equity.

“Venture Capital and Private Equity invested more than Rs 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystem. Scaling up this investment requires a holistic examination of regulatory and other frictions,” she had said.

As per the terms of reference, it said, the panel would 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.

It will also review issues, compliances and suggest simplifications and changes around further accelerating the growth of alternative capital to participate in the VC/PE industry.

The panel is expected to suggest measures to further accelerate investments into startups and sunrise sector and recommend forward looking measures and future ready regulatory practices, it said.

The other members of the panel are G Mahalingam, former member Sebi, D P Nagendra Kumar former member CBIC, Ashish Verma former Principal Commissioner Income Tax, Poonam Gupta DG National Council of Applied Economic Research, and P R Acharya, Director Arun Jaitley National Institute of Financial Management.