The BJP manifesto covers a range of issues that affect the digital industry. Though the manifesto meets some of the investor community’s requirements, the challenge lies in quick implementation of these reforms. Some of the proposed moves in e-governance and GST have already been either initiated or listed by the UPA government that has been in power for 10 years.

This time, Medianama checked with investors and VCs what policy changes are required in the ecosystem, and what changes the new government is likely to make. Here are their responses:

Investment environment
Pankaj Jain, 500 Startups
– If Rwanda has policies where a company can be setup in 24 hours for $100, why can’t we do this in India?
– Make it easier to invest in young startups. Have some loose requirements but don’t make it hard for individual angel investors and funds.
– Make the rules for FDI easier to manage.
– Receiving FDI for any Indian company is a nightmare. The banks have no clue what they need to do and everyone points fingers.
– Welcome International players who want to invest in India. Make it incredibly easy for them to deploy capital in India and support the Indian growth story.

IAMAI
– Make the environment conducive for angel investments and other sources of funding for startups and Internet businesses

Abhishek Gupta, TLabs
– Create a government fund for very early-stage startups and more accelerators (possibly in collaboration with corporates, not universities)
– Enable easy flow of money to Indian startups and institutional investors, currently it is a mess.
– Make FDI in startups an easy process.

Suresh Shanmugam – Saama capital
– Ease capital flows into the country from foreign investors
– Allow FDI in retail.

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Taxation
Pankaj Jain, 500 Startups
– Simplify taxation (I’m sure that’s on everyone’s list)
– Allow individuals to get writeoffs or at least tax credits for angel investments they’ve made that have failed.
– Make startup taxation and accounting simple and not onerous on young companies.

Abhishek Gupta, TLabs
– Provide tax incentives to corporates to fund and incubate new ideas.
– Better tax plans for money invested in startups, if investments are made by registered institutional investors and angels. Tax the returns rather than the invested money.
– Tax breaks and other benefits for startups. Start a program to provide tax breaks for a few years.

Sharad Sharma, Angel Investor
– Fair taxation; Software products are unfairly taxed as both goods and services.

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Infrastructure
Pankaj Jain, 500 Startups
– Build new, planned cities with roads, water and electricity to support growth over the next 20 years
– 256k, 512k or even 1Mbps Internet connections is pitiful. In a country like India, broadband should be defined as a minimum of 5Mbps if you want India’s youth to compete in the global marketplace and have access to the same resources that people in China or Korea have. Get bold and demand telcos to provide a world-class infrastructure in cities and rural areas or they lose their 3G/4G licenses.

IAMAI
– Reform telecom policy measures to promote shared infrastructure models as well as new technologies such as dynamic and shared spectrum, along with removing impediments to large public wi-fi projects.

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Support for innovation
Pankaj Jain, 500 Startups
– The government should stay out of the innovation game.
– Make it easy and lucrative to do business.
– Attract the best talent from around the world to come to India and do business by regulating less, offering great tax incentives or tax holidays and providing great, affordable cities to live and work in.

IAMAI
– Keep the Internet open and allow innovation to thrive.
– Provide incentives to mobile app technology development and digital finance.
– Ensure regulations are not holding back the growth of these industries in India.

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E-governance
Pankaj Jain, 500 Startups
– In the 21st century, why do we need physical signatures on all documents? Why are e-signatures not recognized or supported by the IT dept, courts, CAs, etc?
– All forms and documents submitted to the government should happen electronically. It cuts out inefficiencies and opportunities for corruption.

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Other issues
IAMAI
– Ensure India’s financial and commerce policy-makers study the problem affecting the sector and prevent further regulatory roadblocks.

Abhishek Gupta, TLabs
– Include entrepreneurship as a study in undergraduate curriculums so that the student have a knowledge about the support system around entrepreneurship and see it as a career choice.
– Retain Indian startups.
– Create programs that can attract foreign entrepreneurs.

Shailesh Vikram Singh, SeedFund
– Simplfy rules for exit and company formation.

Sharad Sharma, Angel Investor
– Focus on software products as one of the three key industries. This requires a set of new policies.
– Develop the software product industry across defense, aerospace, electronics and software. We need to invest in these industries as they provide the kind of infrastructure that will transform India at large.
– Develop a software patent regime that favors domestic innovation.

Suresh Shanmugam – Saama capital
– Implement realistic and consistent pricing guidelines mentioned by the RBI.

IAMAI
– Carry forward reforms to the rules issued under the Information Technology Act and ensure copyright law allows Indian web developers to innovate.

Which of these demands will the Modi government work on

We compared the industry requirements with the BJP manifesto release in April. The following are in sync with the investor community’s requirements.:

On investment
– Barring the multi-brand retail sector, FDI will be allowed in sectors wherever needed for job and asset creation, infrastructure and acquisition of niche technology and specialized expertise. BJP seems to be committed to protecting the interest of small and medium retailers, SMEs and those employed by them. The FIPBs (Foreign Investment Promotion Board) functioning shall be made more efficient and investor friendly.
– Commit to ensure that the retailers and SMEs don’t have to spend time and money for seeking multiple licenses to start the business. There will a system in place to avoid harassment of small traders.
– Set up trade facilitation to ensure easier customs clearances and visas for business travel.
– International linkages for exports, availability of credit through a dedicated SME bank, supply chain efficiencies, adoption of IT, support in R&D and innovation, and a policy support for enhancing the mandate to purchase from SME for large scale projects.
– Government will be redefined by elimination of whatever is obsolete in laws, regulations, administrative structures, practices and would be purposive.
– Our attempt will be to move towards a single-window system of clearances both at the centre and also at the State level through a Hub-spoke model.

On taxation
– Undertake a comprehensive review of the legal system to simplify complex legislations – converge overlapping legislation, as well as remove contradictory and redundant laws.

On infrastructure
– Wi-Fi facilities will be made available in public places and commercial centres.
– Set up a National Optical-Fibre Network up to the village level.
– Use technology to reduce transmission and distribution losses.

On innovation
– The credibility of the regulatory bodies shall be restored. The procedures to make appointments to senior positions shall be made transparent and merit and ability shall be the sole criterion.

On E-governance
– Mandate digitization of all government work to reduce corruption and delays.
– Provide technology enabled e-Governance, to minimize the discretion in the citizen-government interface.

Others
– Initiate a Government – Industry Dialogue, a channel for regular interface with the industry.
– Commit to ensure that the retailers and SMEs don’t have to spend time and money for seeking multiple licenses to start the business. There will a system in place to avoid harassment of small traders.
– Mandate digitization of all government work to reduce corruption and delays.
– The manifesto states, ‘We shall work with the State governments to usher in the GST in an appropriate timeframe’. However, no specific timeline has  been mentioned.

– BJP claims in its manifesto it will initiate nation-wide ‘district level incubation and accelerator programme’ for encouraging innovation and entrepreneurship.

– The manifesto doesn’t mention anything in favour of infrastructure. It will only mentions plans of investment in logistics infrastructure and ensuring power supply in manufacturing.

– Addressing the employability issue by initiating a multi-skills development programme in mission mode (in education)
– BJP will initiate nation-wide ‘district level incubation and accelerator programme’ for encouraging innovation and entrepreneurship.

VCCircle quoted an investor on the condition of anonymity, “The problem we had with the earlier government was not that they did not know what to do but they never empowered their people to take decisions.” In Gujarat, the main change industrialists saw was easing of regulatory approvals. Seeing the progress in Gujarat, it’s likely that the Modi regime may strictly and effectively implement some of the solutions.

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