IVCA's 2014 Pre-Budget Recommendations
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The Indian Private Equity & Venture Capital Association's (IVCA) 's pre-budget recommendations for the 2014 Budget are attached in two parts. Part A contains tax-related reforms while Part B contains reforms of a policy nature.
These recommendations have been prepared after consulting respected fund managers with experience of investing in India and leading PE/ VC and tax experts.
It is vital to appreciate that private equity and venture capital are very different forms of capital for a variety of reasons, namely:
- Long-term Character: PE & VC remains invested in firms for 5 to 10 years on average unlike other forms that flow in and out based purely on short-term impulses;
- Building Businesses, Entrepreneurship & Infrastructure: PE & VC cover their cost of capital by helping Indian entrepreneurs build excellent businesses by providing value-added support during the life of their investment. This is done in various forms with the help of the funds' highly experienced and expert operating partners. PE and VC funds support innovation, creativity , good governance and high quality standards. This results in well-managed and high quality enterprises that can compete on the world stage and meet the needs of Indian consumers and citizens.
- Quantum of PE & VC leads to job creation: In the last decade or so , PE & VC firms have provided over $ 75 billion to Indian enterprises to support their growth plans. These investments have led to higher tax revenues and more jobs for our country. The most interesting aspect is that if the respected new Government accepts our recommendations mentioned in Part A and PART B, the annual volume of PE & VC investment could reach a new height and meet a level of $ 40 billion annually as indicated in a recent PWC report. This will help create much-needed jobs for our youth , help make our entrepreneurs world-class and help the Government raise more revenue in the shape of direct and indirect taxes.
- Our Association stands ready to answer, explain and educate all stakeholders about the benefits and nature of PE & VC as well as the reforms needed to catalyze the growth of this form of capital.
Arvind Mathur
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President
Indian Private Equity & Venture Capital Association (IVCA)
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Aakriti Bamniyal
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Indian Private Equity & Venture Capital Association (IVCA)
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