In order to make India a start-up nation, fillip has to be given to bring in more domestic capital in the economy. Explain (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
Abdul hakkim 3 years
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IAS Parliament 3 years
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IAS Parliament 3 years
KEY POINTS
· The year 2020 first set the pace, seeing the most number of new unicorns in a year, with 11 start-ups reaching the milestone only to be topped by 2021.
· India is the largest global exporter of software services, with five of the 10 most valuable software services companies being Indian.
· The government worked hard to connect all Indians through a common digital identity (Aadhaar) and provided bank-account access for all.
· A large number of people migrated to digital services and got accustomed to purchasing and transacting on e-commerce.
Need for domestic capital
· India’s technological advancement is still inhibited by a paucity of local capital.
· India invests only $10 billion a year, with 90% being overseas capital.
· But India requires decisive policy measures, in addition to the Digital India initiative.
· Out of the 59 unicorns, nearly 30 are domiciled outside India, driven outside by outdated forex regulations, non-implementation of relevant federal regulations, tax terrorism.
· Investors like LIC cannot excuse themselves from doing so, citing their lack of knowledge towards such investments.
· India’s regulations for trusts, pension funds, and insurance companies have recently been changed to allow their investments in fund of funds.
· What the nation needs at this hour is helpful policies in foreign exchange and taxation that supports more domestic institutional capital.KEY POINTS
· The year 2020 first set the pace, seeing the most number of new unicorns in a year, with 11 start-ups reaching the milestone only to be topped by 2021.
· India is the largest global exporter of software services, with five of the 10 most valuable software services companies being Indian.
· The government worked hard to connect all Indians through a common digital identity (Aadhaar) and provided bank-account access for all.
· A large number of people migrated to digital services and got accustomed to purchasing and transacting on e-commerce.
Need for domestic capital
· India’s technological advancement is still inhibited by a paucity of local capital.
· India invests only $10 billion a year, with 90% being overseas capital.
· But India requires decisive policy measures, in addition to the Digital India initiative.
· Out of the 59 unicorns, nearly 30 are domiciled outside India, driven outside by outdated forex regulations, non-implementation of relevant federal regulations, tax terrorism.
· Investors like LIC cannot excuse themselves from doing so, citing their lack of knowledge towards such investments.
· India’s regulations for trusts, pension funds, and insurance companies have recently been changed to allow their investments in fund of funds.
· What the nation needs at this hour is helpful policies in foreign exchange and taxation that supports more domestic institutional capital.
