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I’d focus on research, quality universities

I’d focus on research, quality universities
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First Published: Thu, Feb 21 2008. 12 22 AM IST

Rajesh Sukumaran.
Rajesh Sukumaran.
Updated: Thu, Feb 21 2008. 12 22 AM IST
What are the three things you wish for from the Budget?
a. Allowing pass-through status for all sectors rather than a select few for a venture capital fund.
b. Exempting Esops (employee stock option schemes) from fringe benefit tax. Start-ups need talent and talent requires money, which is something that a start-up seldom has to throw around. Traditionally, Esops have been a way to hire and retain talent.
Look at it this way, why should a well-paid professional throw it all away and join the rough-and-tumble world of a start-up? The clinching factor would most definitely be the faith he puts in the business and reward that the founders give through options or sweat equity. It is to include the employee in the growth of the firm and drive his/her passion and performance.
And that is much more than a fringe benefit, wouldn’t you agree?
c. Extend the tax exemption for the IT sector.
If you could end one thing, what would that be?
The red tape.
Rajesh Sukumaran.
I remember reading somewhere that it takes 89 days to start a business in India, that India is ranked 70 on the corruption Index. I believe that creating wealth is better than distributing wealth, and, in the long run, more employment can be generated by encouraging entrepreneurship at a local level than by any dole-outs or subsidies or employment guarantee.
If you were finance minister, what would be the one thing outside your industry you would want in the Budget?
Lower income-tax rates?...but seriously I would like to see a major effort on infrastructure for the obvious reasons. Also, more spending on quality universities and research institutions with a focus on commercializing the research.
One common crib that you hear in our circles is that innovation happens in the (Silicon) Valley and that it’s difficult to see that level of innovation or cutting-edge work here. While that is a debatable quote, to a large extent the dominance of the US economy is because of the commercialization of the cutting-edge work carried out in their MITs, Stanford, PARC, etc.
Some of the largest US firms such as Microsoft, Google, Oracle, Sun Micro, etc., are a result of their university research.
What is the one thing you don’t want changed?
The initiative that the finance minister is taking on education (hope the implementation is as good as the thought process behind it) and the pro-liberalization initiatives such as privatization and deregulation.
Which budget disappointed you the most? Why?
2005-2006; fringe benefit tax.
One proposal you think is shot down in every budget but shouldn’t be.
Tax reforms to make the system simpler and less maddening to the common man. A lot of people don’t pay tax because the system is so complicated that they need an accountant and that costs more money.
Wider tax base and lower rates. Taxation slabs would need to be progressive in nature, to bring in financial inclusion.
What would you consider to be inclusive growth?
Inclusive growth!... We seem to be hearing that phrase everywhere this past year. It should be the phrase of the year.
In my view, inclusive growth is when everyone shares the responsibility and the rewards of our booming economy. In the words of Montek Singh Ahluwalia, “inclusive growth does not mean that everyone has to be protected all the time. It means that people recognize that if they lose out, they will be treated in a fair way”.
(Rajesh Sukumaran is investment manager of Mercatus Capital.)
By Vidhya S.
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First Published: Thu, Feb 21 2008. 12 22 AM IST