Concept of round tripping is beyond me. It is like closing the barn door after the cows have left. It is only hindering legitimate business.

The idea that preventing round-tripping of money is a way to prevent conversion of black money into white money is a laughable one. So how does one know which money is roundtripping in the first place? Simple, presume all inbound investments/donations are are round-trippers and put the monkey on their back to prove that they are not doing it. It is asking one to prove a negative!

Indians are now allowed to invest overseas legally, but not into funds that also invest in India, as that investment is tagged as a round tripper. Most of the VC Funds raise money from investors all over the world, including from India. Once, even one Indian invests in the fund, the fund becomes ineligible to invest in India.

The effort should focus on the formation of the black money in the first place. Problem is that people who are sharp enough and bold enough to deal in black money do not normally use regular banking channels for their transactions. Their transactions are not easily traceable. Most formation of black money is done by people in cahoots with people in power. They cover their bases well.

India has not proven to be a lucrative place invest for VCs. With government focused on taxes only, it is fast becoming not worth the bother.





Comments are closed.