Nithin Kamath, CEO of Zerodha, describes strategies to promote startup investments, ranging from tax breaks to retail investors.
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Nithin Kamath, the CEO of Zerodha, has been outspoken about the different actions and initiatives that may be made to encourage investments in India’s capital markets and enterprises. Kamath outlines steps that could encourage startup funding on Monday. In his opinion, there is a need to make better use of local wealth and lessen reliance on foreign venture capital (VCs).
In his Twitter thread, Kamath illustrated how capital gains exemptions and tax breaks in the US have been successful in encouraging rich individuals to invest in startups.
“The UK offers 50% tax relief & capital gains exemption for startup investments,” he wrote in a tweet. This looks to be a wonderful strategy for encouraging wealthy people to fund businesses.
Because of this, he continued, “We maybe need similar schemes to reduce our dependency on foreign VCs & better use our local wealth stuck in Gold, Real Estate, & FDs.”
In addition, Kamath highlighted the need to spread money evenly throughout the country rather than just the richest 1%.
He claims that only until a significant portion of Indians can benefit from wealth creation when Indian enterprises succeed is this achievable. Nowadays, money is largely captured outside of India.
Because of this, according to Kamath, “We have to prod Indian retail investors to shift some of their assets from FDs, gold, and real estate to support Indian entrepreneurs and perhaps help the country grow inclusively.”
To Kamath’s post, many people responded. “Idea is good but Retail investors directly participating as VC would be more riskier than F&0 trading,” a user by the name of Devesh Tiwari commented. It should be done using Sovereign-guaranteed pension or insurance funds.
Another user, Swami. Blog stated that they should first ensure that the current IPOs are profitable before continuing to develop new firms. What is the objective of wealth degradation with so many businesses and initial public offerings, he continued. Startups must offer solutions to widespread issues.
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