Venture capital is attracting the attention of Indian investors as it
is more attractive when compared to traditional sources of
financing. Venture capitalists finance those innovation and ideas
that have a potential for higher return on investment coupled with
high risk. In the broadest sense, therefore, venture capital connotes
risk finance as well as managerial support. Research reveals that
India is emerging as an exciting market for venture capitalists. In
India, this potential is confined not only to Information Technology
(IT); it is equally relevant in several other areas such as
biotechnology, pharmaceuticals, media, entertainment, agriculture,
food processing, telecommunications and other services. This
research article highlights the need for developing a congenial
environment for the growth of the venture capital industry in India
on par with such industries in America, Europe and Asian countries
like Japan, China, Korea, Singapore, Indonesia, Philippines and
Malaysia.
This article also throws light on the venture capital
environment in India and the challenges lying ahead.
Several research studies indicate that India is emerging as an exciting market for venture capital
investments due to the rapid growth of the economy—a result of globalization and
liberalization. The investments made by various venture capitalists in India are a case in point.
The success story of India, in the area of Information Technology (IT) predominantly in E-Governance,
Data communications, Digital Signal Processing-based solutions and low-cost manpower-based software
solutions demonstrate that there is a tremendous potential for the growth of knowledge-based industries
in India. This potential is not only confined to Information Technology (IT) but is equally relevant in
several other areas like biotechnology, pharmaceuticals, drugs, agriculture, media, food processing,
telecommunications and other services. Given the inherent strength by way of its skilled and cost
competitive manpower, technology, research, entrepreneurship, congenial environment and policy
support, India can achieve rapid economic growth and competitive global strength in a sustainable
manner. |
