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The Ministry of Finance is creating a commission to propose measures to regulate investments of private equity firms and private equity firms


The Ministry of Finance has created a commission that will study and propose measures to solve regulatory and other issues that will allow to increase investments of venture capital and private investment companies. The ministry, in an official order dated September 9, said the committee will comprehensively examine, using a systems approach, cross-cutting frictions and potential accelerators from regulatory and taxation policies to facilitate investment and encourage “investment in India”.

The committee will also formulate regulatory measures in addition to emulating global best practices. The work of this “expert committee” will be coordinated by Syed Zubair Naqvi, Joint Director (DI), DEA.

The expert committee comprises Melevetil Damodaran, former Chairman, Securities and Exchange Board of India (SEBI); G Mahalingam, Former Permanent Member, SEBI; DP Nagendra Kumar, Ex-Member (GST), CBDT; Ashish Verma, former Chief Commissioner of Income Tax; Poonam Gupta, Director General, National Council of Applied Economic Research; Prabhat Ranjan Acharya, Director, Arun Jaitley National Institute of Financial Management.

The announcement from the ministry came just days after several media reports that SEBI had allegedly approached private equity and venture capital firms to share information about their practices and valuation processes, suggesting that high valuations of startups could come under the scanner in the near future.

Funding for the startup ecosystem has also declined this year compared to previous years. According to a report by Ernst & Young, PE/VC investments in the country in July this year were the lowest in more than a year in terms of both value and volume, at $3 billion.

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