To attract investment from venture capital and private equity players, the government on Tuesday said it will set up an expert committee to address regulatory issues faced by the industry.
The expert panel will suggest "appropriate" measures, Finance Minister Nirmala Sitharaman said in her Budget speech for 2022-23.
Venture capital and private equity invested more than Rs 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystems. Scaling up this investment requires a holistic examination of regulatory and other frictions, she said.
"An expert committee will be set up to examine and suggest appropriate measures," she added.
Ashley Menezes, Partner and COO, ChrysCapital and Head – Regulatory Affairs, IVCA, said the setting up of an expert committee to address the regulatory and other friction issues being faced by the PE industry is most welcome and much-needed step announced by the Finance Minister.
"This indicates that the government recognizes the contribution and role of the PE industry, both historically as well as for the future. This will provide a platform to address key issues faced and we look forward to having a constructive discussion with this committee," he added.
According to a report by industry lobby IVCA and consultancy EY, private equity and venture capital funds invested $77 billion in Indian companies in 2021, a jump of 62 per cent over the previous year. Going by the number of deals, there was a 37 per cent growth to 1,266 transactions.
Investments in start-ups were a defining feature of 2021, with $28.8 billion in funding which accounted for 37 per cent of the overall PE/VC investments, the report said.
It added that the year also saw an addition of 44 unicorns or start-ups valued at over $1 billion, making India the third-largest home for such companies.
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