The Centre will soon hold discussions with insurance and pension regulators on a proposal to enable pension funds, and insurance companies such as LIC to invest in start-ups.
It also said that online sale of medicines was allowed under the existing law and the Health Ministry would soon issue a clarification in this regard.
Stating that the Department of Industrial Policy and Promotion (DIPP), the nodal government agency on the start-up policy, had held “preliminary discussions” on the proposal of insurance and pension funds investing in start-ups, DIPP Secretary Ramesh Abhishek told reporters that further discussions would be held soon with regulators and stakeholders.
“The pension and insurance funds manage their risks in their own way. So, to do that (investing in start-ups), they have to do a reassessment of risks.”
The department convened a meeting with start-ups as well as incubators and accelerators (those assisting start-ups to mature and scale up) on Monday, which was attended by Commerce & Industry Minister Nirmala Sitharaman and Mr. Abhishek, among others. On other issues, Mr.Abhishek said DIPP was also in talks with the Health Ministry on issuing a clarification under the Drugs and Cosmetics Act to boost the e-pharmacy business.
Ms. Sitharaman said the e-pharmacy players had met her recently in this regard.
Another issue that came up for discussion was the hardships that some ‘not-for-profit’/’non-profit’ start-ups/incubators in the ‘social impact’ segment are facing in obtaining and utilising funds from foreign sources. They have sought clarity on norms under the Foreign Contribution (Regulation) Act (FCRA) and the Income Tax Act.
Currently, as per the FCRA, they have to explain that the funds received from foreign sources and the income earned from businesses are not linked to ‘speculative activities’ (including those related to investments in stock markets).
Other issues discussed included the need for review of ‘archaic’ laws such as the Indian Societies Registration Act of 1860 to ensure they are either updated or done away with so that they do not hinder the start-up ecosystem. To ensure greater engagement between the financiers, mentors, start-ups and regulators, there will also be a meeting soon between SIDBI, the DIPP, leading venture capital funds, incubators and accelerators, Ms.Sitharaman said.
On a query about establishing a ₹2,000-crore credit guarantee fund for entrepreneurs, Mr. Abhishek said the DIPP would soon approach the Cabinet for its nod.
