Insurance firms may be allowed access to VC funds
In a wide ranging recommendations, the committee headed by former revenue secretary Sunil Mitra has also recommended that banks should be encouraged to invest in the VCFs by treating these investments as “priority sector” funding without capital market exposure and provisioning norms being applicable. It has also suggested income tax breaks to individuals, on the lines of similar deductions provided in Singapore and USA, for investments made through angel groups or in early stage venture funds. Similar breaks has also been proposed for angel investors in unlisted entity where such investment is for meting seed capital of the beneficiary entity. For such investment, the individual ceiling is proposed to be kept at R5 crore and for group R10 crore.
The panel has also mandated that 5% of all PSU procurement must come from SMEs or companies backed by Category I alternate investment funds (AIFs). It has said that a a government fund-of-fund of R5000 crore corpus should be established to provide matching funds for new Category I AIFs. This type
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