Union Finance Secretary and Secretary of Department of Economic Affairs Rajiv Mehrishi, along with a team of officials, met several leading entrepreneurs here at the weekend, to discuss regulatory issues and to enhance ease of doing business. Besides, taxation issues were also discussed.
The meeting, organised by software industry think-tank iSpirt, was also attended by Joint Secretary Manoj Joshi, National Institute of Public Finance and Policy Head Ajay Shah, Principal Economic Advisor Ila Patnaik and Capital Markets advisor C K G Nair.
While Mehrishi promised "deeper institutional reforms", representatives of iSpirt suggested to him a new programme, Jan Samridhi, for the government. "The programme builds on the open API work that iSpirt has already done and proposes-specific and inter-related policy and regulatory changes," Manju Nanjaiah, founder and CEO of Swarmverse BigData Solutions, who was present at the meeting, wrote in a blog.
The finance secretary also promised a quick resolution to taxation issues faced by new technology startups that arise mainly due to a poor definition of software products in government documentation.
According to the current tax laws, anything intangible can only be a service and can’t be a product at all. However, a software can be a product as well as a service. Hence, taxing software products proves to be a cumbersome process.
"This was the first interaction with the government on those lines," said iSpirt Governing Council Member Sharad Sharma, who was part of the meeting, said, about the discussion on cashless India.
The country is witnessing the rise of a number of mobile wallet service start-ups, including Oxigen Services, PayTM and MobiKwik. The road to a cash-free India -- from physical cash to mobile wallets and plastic -- will look similar to the transition from share certificates to digital transaction of shares that is currently in place.
The benefits of going cash-free include curbing black money and expansion of micro-credit to small businesses. Countries such as Denmark and Sweden are only a few steps away from becoming cash-free countries.
According to Sharma, the meeting was only another effort to educate and partner with policy makers to eventually burst the obstacles faced by entrepreneurs in India.
The four-hour interaction also saw 10 start-ups -- Ezetap, Instamojo, Capillary, PeelWorks, InMobi, Foradian, Team Indus, Forus Health, OlaCabs and Practo -- showcasing their products.
This was the third such meeting within six months, where a regulator or a senior government official has met entrepreneurs and discussed their issues. In December 2014, Securities and Exchange Board of India chief U K Sinha had met new technology companies to discuss the problems the latter faced while planning a domestic IPO, fund-raising from abroad investors, and regulatory differences.In March, the start-up community had hosted Reserve Bank of India Governor Raghuram Rajan to discuss the challenges faced by new companies.