The Reserve Bank of India will take steps to simplify doing business for start-ups in India and also help create an ecosystem to boost growth of start-ups, Raghuram Rajan said in his sixth monetary policy statement on Tuesday.
The Reserve Bank of India will take steps to simplify doing business for start-ups in India and also help create an ecosystem to boost growth of start-ups, Raghuram Rajan said in his sixth monetary policy statement on Tuesday.
"In keeping with the Government’s Start-up India initiative, the Reserve Bank will take steps to ease doing business and contribute to an ecosystem that is conducive for growth of start-ups,: Rajan said in his statement.
"These measures will create an enabling framework for receiving foreign venture capital, differing contractual structures embedded in investment instruments, deferring receipt of considerations for transfer of ownership, facilities for escrow arrangements and simplification of documentation and reporting procedures. A detailed statement is being issued separately.
Later, while answering a question about the steps that the RBI is likely to take to ease business environment for start-ups in India, Rajan said, "start-ups want money; it can take it in different forms, which usually includes complicated contracts, which are sometimes are not allowed under FEMA."
Over and above that, "when you sell the company, all the receipts don't come immediately, during the time (and) the and is escrowed; this be extended so sales can continue," he added.
"We are supporting the start-up process by making it easy to raise money mostly from abroad, and also make it easier to complete processes, mostly by making it possible online."
The initiatives come in the wake of the recently Start-up India action plan launch event. Prime Minister Narendra Modi has already announced a a corpus of Rs 10,0000 crore to fund start-ups, a tax holiday and inspector raj-free regime for three years, and self certification with respect to nine labour and environmental laws for the first three years.
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