Date:17/12/2005 URL: http://www.thehindubusinessline.com/2005/12/17/stories/2005121702780400.htm

Back Nasscom for separate venture fund as back-up for investors

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(From left) Mr Kiran Karnik, President, Nasscom, Mr Ramalinga Raju, Chairman, Satyam Computer Services Ltd, Mr Jayant Sinha, Partner, McKinsey and Company Inc, Mr S. Ramadorai, Chairman, Nasscom and CEO, Tata Consultancy Services, and Mr Noshir Kaka, partner, McKinsey and Company, India, at the release of the Nasscom-McKinsey Report 2005 in Bangalore on Friday.— G.R.N. Somashekar

Bangalore , Dec. 16

THE National Association of Software and Services Company (Nasscom) wants the Union Government to set up a separate venture fund to fuel innovation in the software products space.

"This kind of a fund would ensure a sort of back-up for those angel investors and allow them to take a greater risk while funding product start-ups," said Mr Kiran Karnik, President, Nasscom. He was speaking to reporters on the sidelines of the India Strategy Summit 2005, organised jointly by Nasscom and McKinsey & Company, on Friday.

The fund would act as a back-up for angel investors by minimising the risk and encourage seed or early stage funding in the country. "In order to avoid the misuse, the fund could be managed by a group of recognised professionals, who could be rated by agencies like Crisil among others," he said.

This fund should also help smaller companies to patent their ideas. "We also want to encourage patenting especially among the smaller companies," Mr Karnik added.

Mr Karnik also said that Nasscom would ask the government to liberate higher professional education by allowing investments — key to creating facilities that attract people from India and abroad.

"We certainly need some loosening at least on an experimental basis (in professional education). I am not saying you suddenly throw open the education. We need to see whether we can liberate it, particularly higher professional education from all the constraints it is tied with today," Mr Karnik said.

When corporate entities could be allowed to set up hospitals, "what is the hesitation (in the higher education sector)... let the market forces play," he said.

At least on an experimental basis, the government should allow those who are willing to pay what the teachers deserve, charge the students for what the market would bear and provide the curriculum the industry needs and set up facilities that attract people from India and abroad, he said.