##What should the Govt. do to create a more investor friendly environment?
Indian government can take inspiration from some of the recent sovereign initiatives by countries like Russia, China, U.A.E, Kingdom of Saudi Arabia, Singapore etc. Russia launched Russian Venture Company in 2006 with US$1B as fund of funds that directly invests in companies as well as in other venture funds. Currently, they have more than 15 active funds ranging from technology to biosciences to renewables to infrastructure. Russia has also launched US$10B Rusnano fund that focuses on late stage large scale nano-technology investments. Abu Dhabi sovereign wealth fund, MUBADALA launched $100B technology fund in 2008 and invested more than US$20B in creating GlobalFoundries, the 2nd largest semiconductor manufacturing company. Needless to say, China has launched numerous funds both at provincial and central levels pumping hundreds of billions of dollars into start up ecosystem in the form of investments, incentives, and subsidies targeting specific sectors such as manufacturing, semiconductors, energy etc. Kingdom of Saudi Arabia has recently launched TAQNIA, a technology investment vehicle in addition to their support for early stage R&D through King Abdulaziz City for Science and Technology (KACST). Countries like Singapore and Israel have very active and successful government driven investment vehicles.
There is no short cut here. Indian government must launch numerous investment funds both at central and state levels targeting wide range of sectors by directly investing in companies as well as in private funds to create and sustain healthy startup and venture capital ecosystem. Electronic Development Fund (EDF), National Microprocessor Initiative fund (NaMi) and Karnataka Information Technology Venture Capital Fund (KITVEN) are few good starts. But, government must find ways to quickly deploy and disseminate this capital into the system to accelerate the pace of innovation. Some of the recent announcements related to relaxation of SEBI rules related to IPO filings for startups is also a step in the right direction. But, more needs to be and can be done.