VCs, startups seek government action on grey areas and policy clarity

Venture capitalists and startups want the government to address grey areas impacting consumers, harmonise policy, and make quicker decisions to end the uncertainty.

During a panel discussion organised by think tank 'The Dialogue', angel investor and business strategist Lloyd Mathias said government policies should aim to minimise regulation on sectors that have an impact on large consumer base.

"While the government is regulating larger players with multiple different legislations, there are sectors that are completely operating in the grey area which have an impact on large tracts of consumers. It's crucial for the government to identify these sectors and minimise regulations, ensuring clarity for the startup ecosystem while keeping consumer interests at the forefront," he said.

Mathias said big concerns for investors remain profitability of the startups followed up with issues around corporate governance.

Peak XV Partners Chief Public Policy Officer Shweta Rajpal Kohli said the government and regulators are fostering a conducive business environment by ensuring progressive policy making and allowing several opportunities for consultations with industry.

"There's a shift towards principle-based and data-driven policymaking, with an emphasis on fairness. The focus of any policy should be on empowering the end consumer. Policies should remain impartial, and should not provide an unfair advantage to any segment, while being light-touch and not too prescriptive," she said.

In response to a question on policies around crypto and online gaming, Kohli said that there is a need for quicker decision to reduce uncertainty in a segment and the uncertainty should not be allowed to stay for long.

Softbank-backed Meesho's Head of Government Relations and Public Policy Prachi Bhuchar said that regulation serves a valuable purpose but there should be harmonisation of policies.

"Companies don't want to absolve themselves of liability and are all for consumer protection, but if we have done our due diligence, seller KYC, and have strong terms and conditions to keep fraud in check, then marketplaces should not have additional fallback liability to contend with. If e-commerce companies are forced to become more stringent then small sellers will be impacted and the entire ecosystem in turn," she said.

Axiom5 Law Chambers partner and co-founder Rahul Rai said unlike Silicon Valley, India seeks to balance the interests of both the end consumers and smaller Indian companies.

"We have seen that any disruption that disproportionately affects either of the two, invites prompt government policy intervention, aiming to foster access and fairness for smaller players while continuing to protect consumer interests," he said.