Start-ups will flourish if regulations are eased: Infosys ex-CFO V. Balakrishnan
Hyderabad: India’s start-ups will flourish if the regulatory environment becomes more friendly as all other things—funding, talent and ability to connect to global market—are in place, says a senior IT industry figure.
V. Balakrishnan, the former chief financial officer of Infosys Ltd, told PTI that investors are now focusing on B2B start-ups than B2C. According to him, a lot of churning has happened in the start-up field in the last two years but there is lot of stability now, and funding has become much more focused with not all companies attracting money.
B2C start-ups had funding challenges which have reduced of late with large players among them having raised money. “But B2B market is the focus now; most of the funds are focusing on B2B because capital requirement is low and I think exit is also happening in B2B. I think a lot more focus in the VC circles is on B2B companies now than B2C,” he said.
The biggest problem faced by start-ups is on regulatory and compliance front, Balakrishnan said, citing the income tax department’s notices to start-ups vis-a-vis the angel tax. “I think some of the regulatory changes have to be much more friendly for startup companies and compliance regulation should ease because you can’t expect a startup started by an entrepreneur who is 25-30 years (old) to comply with some 30 to 40 laws,” he said.
He said regulations and compliance have to be made simple and much more friendlier for start-ups. “The recent notice issued by Income Tax department to all startup companies on funding is not helping because you can’t expect a startup company which raised money to pay tax on the capital,” Balakrishnan said.
Regulation is a key challenge and there needs to be much more clarity. If that comes, the environment (for start-ups) will change for the better, he said. “Start-ups should have a different environment for regulatory compliance; you can’t expect a startup company to adhere to all matured company regulations,” Balakrishnan said.
“I think if the regulatory environment becomes much more easier, start-ups will flourish as all other things are there funding is there, talent is coming in, I think they are also able to connect to the global market,” he said.