Zerodha’s chief executive Nithin Kamath has been vocal about various steps and measures that can be taken to drive investments in India either capital markets or businesses. On Monday, Kamath explains measures that could drive startup investments. He believes there is a need to reduce dependency on foreign venture capitals (VCs) and better use of local wealth.
In his Twitter thread, Kamath gave an example of US tax relief and capital gains exemptions which have worked effectively in incentivizing the wealthy to invest in startups.
He tweeted saying, “UK offers 50% tax relief & capital gains exemption for startup investments. This seems a great way to incentivize wealthy to invest in startups.”
Accordingly, he added, “We maybe need similar schemes to reduce our dependency on foreign VCs & better use our local wealth stuck in Gold, Real estate & FDs.”
Further, Kamath shed light on the biggest problem to solve in India is to spread wealth inclusively and not just in the top 1%.
According to him, this is possible only when wealth creation can be captured by a large subset of Indians when Indian businesses do well. Today, most wealth gets captured outside India.
Hence, Kamath says, “We have to nudge Indian retail investors to move some of their assets from FDs, gold, and real estate to back Indian entrepreneurs and maybe help the country grow inclusively.”
Many replied to Kamath’s post. A user named Devesh Tiwari said, “Idea is good but Retail investors directly participating as VC would be more riskier than F&0 trading. It should be done via pension Or insurance funds guaranteed by Sovereign.”
Another user, Swami. Blog said that they need to make sure the existing IPOs are successful then keep creating the startups. He added, “What is the point of wealth erosion with so many startups & IPOs. Startups need to bring value to common problems.”
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Updated: 19 Jun 2023, 08:34 PM IST