Category Archive : News

A Letter to my Prime Minister

Dear Prime Minister,

I wanted to write this open letter to you yesterday but couldn’t allow myself to logically put down in words the emotional, mental and physical hurt of the events of February 14th. As I got ready this morning, I silently cursed myself for not responsibly expressing my feelings. Just then, I heard the cries of a child on the TV, who had lost his father in the event.

A TV channel was showing the anguish of the 40 families, villages and communities who had lost their sons. I didn’t even realise when the tears started flowing from my eyes. That’s when I resolved to write this letter, even if it was a day late.

As I write, I can barely see the screen through my watery eyes, but I demand from you, who promised to protect us from the perpetrators of such violence, to whom I gave my vote in 2014, a vengeance. Vengeance for the blood of our soldiers, who were killed in a cold blooded murder by people and organisations that claim to be of a higher god, people who represent one of the largest religions in the world (which they don’t) but are actually just petty terrorists without any religion and humanity. They need to be crushed for the petty cockroaches that they are!

For all their claims of bravery and sacrifice, these terrorists don’t even have the courage to face my slain brothers face to face. Instead, they choose the cowardly option of attacking when my soldiers were not ready. They knew very well that they did not stand a chance in a hand to hand combat, and hence adopted such pathetic measures.

These terrorists are not deserving of any mercy, trial, diplomacy or compassion. All of these have been tried in the past and met with the loss of even more blood of our men. This cannot continue.

Neither can there be a continuance of restraint afforded to the nations that directly or indirectly shelter these people, their intent and their organisations. They are as culpable of this murder as the people that carried it out.

You have promised independence for our armed forces but I also expect that you will not restrain them for completely defeating the enemy like the Prime Minister did in 1971. You have to allow our forces to deliver an answer that does not leave anyone behind, even to listen to it. I demand from you the restoration of the faith that our democracy, armed forces and judiciary has placed in you. I believe you will not disappoint us.

And if you feel that there isn’t enough blood available to support the country and the forces, you can start by taking mine.

Jai hind, Mr Prime Minister.

Anirudh A Damani


My Angle on the Union Budget 2019

I would rate the budget presented by FM Piyush Goyal, a solid 4 out of 5. The budget managed to do the difficult dance between fiscal prudence and a sustainable, stable but progressive tax policy. More importantly, it provided security to two of the weakest links in India’s growth story i.e. the unorganised work force and the marginal farmers.

It is a common gripe amongst taxpayers that they do not get the benefits of paying taxes which they pay honestly (or otherwise) but various data sources suggest that we have one of the lowest tax revenues to GDP ratios in the world at ~11%. Compare that to Mexico who at 16% was the lowest amongst the OECD countries and most of these countries in this list are developed economies unlike India, where even the most basic infrastructure is being developed. The developing and growing economy is being supported by 6.8 crore taxpayers paying 120+ crores, which is dismal. Until we get to 30% tax revenues to GDP, we as tax payers will continue to bear this burden.

Unlike previous governments, I am happy with the way this governemnt has invested and spent my tax rupees and the change it has brought is visible. In the last 12 months, I visited at least 15 cities that can be classified as Tier 2 or beyond and I travelled to these places by planes, trains and automobiles. I have witnessed the benefits that these infrastructure investments have brought for the people who live in Bharat. Some of the areas that have seen the biggest ROIs are:

  • Connecting North East India with the rest of the country via rail & highways
  • The massive highway construction program
  • Upgrading the intra-city railway network, cleaner and better-equipped railway stations
  • Faster, more efficient and punctual intra-city railway services
  • Sanitation, electricity and home construction coverages

No money has been spent mindlessly. Almost all major urban centres are set to have intercity metro services, the defence spending has improved our security infrastructure and we now have a space programme that will put an Indian in space, with technology that will be developed within the country. These are all developments that I, as a taxpayer, am extremely proud and shall continue to support, with my tax rupees.

In the same vein, the Rs. 6,000 rupee direct cash transfer to farmers should be looked at as the start of an experiment that has its roots in the immortal words of late Rajiv Gandhi who had inferred that only 15% of the money given for welfare of the poorest and weakest sections of society actually received those benefits. This statement was made in 1985 and since then, the situation has barely gotten better.  In fact, the elected representatives have looted everything from seeds, urea and fertilisers that were meant for farmers. So a direct deposit of Rs. 6,000 would actually be equal to Rs. 40,000 benefit that the government would’ve had to dole out in order to achieve the same outcome. The only people that are making the most hue and cry about this are those that have made a living on such ill-gotten gains. However, this time the money will not be fattening the pockets of middlemen who have stolen my tax rupees. Instead, this will be the beginning of the process of plugging the gap. I am supportive of the initiative because the direct benefit transfer has saved us over Rs 90,000 crores according to UIDAI as well as the ancillary gains of the accurate welfare amounts reaching the intended recipients have been significant. Therefore, with this direct income support, it will be yet another nail in the coffin of the middlemen.

My only real grouch with the budget was the lack of support to the VC ecosystem, especially the VC funds. Other than the Rs.10,000 Crore fund of fund allotment (which is extremely difficult and complicated to avail) there hasn’t been any incentive for investors to put money into VCFs. Investing in VC funds is a new phenomenon for most investors, therefore, a tax incentive like offsetting tax on capital gains from real estate or listed securities by investing into SEBI registered VCFs would have provided a boost for investors. Secondly, reducing the tax on gains from VC funds to those from listed equity funds or even lower would have been a positive move.

However, in the end, the government did it’s best to support the ones that needed it most and modestly rewarded those who have contributed to the nation. There was a clear message that the government will encourage consumption but in a way that it directly benefits the targeted beneficiaries. I (as a taxpayer) am extremely satisfied and hope that the successive governments learn and follow the same path.

Lobbying for lower taxes can wait.


My Angle on the Angel Tax Notification

Through a flurry of tweets, DIPP announced the changes that were made to alleviate the Angel Tax problem that the early stage ecosystem has been continuously grappling with. In a recent post I had put forth my own views on how the government could resolve these issues by accrediting angel investors, and to my surprise DIPP did accredit angel investors (in a way)  in the notification made on the 16th of January.

There were several reactions to the notifications which ranged from the positive…

….to the cautiously optimistic

I believe that the government’s baby steps toward rectifying the angel tax issue is a good sign. I also believe that there will be more incremental changes on the anvil and the biggest positive take away from these notifications is that the government is listening and (more importantly) acting.

However, I do feel that DIPP could have invited better representation that just the heads of angel groups. Most of them stand on behalf of investors but rarely make angel investments on their own. Instead the angels that are writing cheques, dealing with founders and tax authorities regularly are the ones who should be getting invited to provide their inputs. A minimum criterion of 25 investments in the last 3 years could be a good starting point. These angels’ inputs would be valuable as they would make the next set of changes more acceptable.

A couple of the changes that I would like to propose to DIPP

Let’s see what the next set of changes are going to be!


Gir’s Sons have India Roaring, on the Cricket Pitch… and Off it Too!

Investment advisors have been selling the potential of 100 crore Indian consumers to investors across the globe for the past 20 years with excellent success – for the advisor. But, investing in that potential has always led to investor gloom and doom. The potential was always there but somehow India always found a way to overpromise and underdeliver, just like the Indian cricket teams that left with tremendous promise for Australian tours, but those expectations almost always came crashing down like a house of cards.

However, today’s India is writing a new script, in cricket and as an economic powerhouse. The potential of 100 crore wallets that was entangled in the web of black money, oppressive taxation, poor infrastructure and expensive logistics in finally unlocked. Demonetisation, Digital Payments, GST and Tax Compliance reignited the hope that this was finally India’s moment but building out rural consumption points was expensive, and it took years if not decades. Unlike the previous failures, this time the economy and the cricket team had those two pieces that have alluded an Indian victory. Interestingly both of those pieces, whether it is the economy or the cricket team, find their roots in Gujarat.

The ability to battle ahead on the trickiest of pitches, facing the most abrasive oppositions and weathering the relentless media attack requires grit & determination. That role has been perfectly essayed by Cheteshwar Pujara who not only blunted the opposition but took the fight to the opposition while the others built around him. Prime Minister Narendra Modi did the same for the economy. The PM’s economic policies improved throughput of government subsidies to the neediest through the smart utilisation of Aadhar. He filled the government’s empty coffers by increasing tax revenues through higher compliance and bringing in the fear of evasion. He also took the fight to the opposition by calling out their “Accidental PrimeMinister” and allowing his team to build better infrastructure, bail out the near bankrupt banking sector and amicably improving or destroying the relationships with our neighbours.

All this gunpower required a spark to explode from someone who would have the planning, intelligence and the pace to bamboozle the opposition. Jasprit Bumrah did that to the Australian batsman, while Mukesh Ambani’s Jio did that to the telecom sector, forcing into submission. Jio’s introductory offers were like Bumrah’s deadly bouncers, Jio’s fast and extensive network like Bumrah’s yorkers and their strategy to hook a user to their content ecosystem was like Bumrah’s slow yorker to Shaun Marsh, it bamboozled them.

The results that India and the world has been waiting for are finally here. The cricket team is 2 wickets away from winning their first Boxing Day match in history. It is a moment that 560 million Indians can watch tomorrow on their Internet-connected devices, a first too. This maturing of India’s potential has driven a record amount of FDI into the country, almost $40 billion flowing in 2018, a whopping $7 billion more than China, a first again, in 2 decades.

The results have taken time and we have endured pain, but the victory is near and will be comprehensive.


Join Artha as an Entrepreneur in Residence

Vinod and I have been playing around the idea of setting up our own version of EIRs (Entrepreneurs-in-Residence) at AVF (Artha Venture Fund). Vinod proposed this idea during our Monday morning pow-wow as a possible solution to the difficulty we have faced in finding an entrepreneurial teams that work in areas where we identify a significant market opportunity or wish/want to deploy funds.  

So, I read about EIR programs and best practices today, and as Vinod has had previous experience with these programs, I believe we could build a similar program at Artha which will be beneficial to both, the entrepreneur and us.  

EIR programs have existed for a while in the developed VC eco-systems,  several CVCs and US universities have successfully utilised the EIR position for their requirements.  

For Artha Venture Fund’s requirements, I found a few articles that provide a good context on what I’m looking for.  

I am convinced that we should try hiring an EIR for a 6 to 12-month period and test out whether this would work for AVF.

The objective for the EIR would be to work on creating a business plan while simultaneously working with the fund team on evaluating start-ups for investments and helping the investee companies. Therefore, the program can only be for people that have been a part of a founding team (or core team) of a funded start-up, big or small.  

While many of the details are yet to be worked out (and I will share them in future posts), here are some that come to mind- 

  • Contract period: 6 months with a mutual option to extend for 6 months 
  • Salary package: 8.00 L / annum (includes a 5% communication allowance) 
  • Work timing:
    1. 9 am to 7 pm
    2. Monday- Saturday
  • Perks: laptop, cell-phone, company paid phone service and a desk 
  • Minimum requirement:
    1. Attending all evaluation sessions 
    2. Helping portfolio companies  
    3. Writing their own business plan  

While most the EIR programs have left the choice of where to focus his/her entrepreneurial energies to the EIR, my fund (as Vinod will rightly remind me) does not have the luxury of millions of dollars coming to its coffers in management fees therefore each penny has to be accounted for to operate a sustainable VC business.  

Therefore, I want to make it clear that we are looking to pick EIRs that have a tech orientation and would like to work in B2B, B2C or B2B2C start-ups (but nothing in deep tech for now).  

Some of the plays that have my team and I interested are:  

If would like to apply for the EIR position, please fill out this form and attach your resume.


Reliving ‘that’ Moment

I was walking back from my shower area in my dorm at Austin College and someone had their door ajar and the TV was tuned onto CNN. As I passed by the room I saw that it was packed with almost everyone on my dorm room floor crammed in. I peered inside inquisitively and saw everyone’s eyes transfixed on the screen where one of the World Trade Centre was bellowing out smoke from its upper floors. I remember some indistinct chatter as to the cause of the fire. Then on live TV, right in front of our eyes, flight 175 went into Tower Two. There was a collective gasp as the world seemed to have come to a standstill and it would never be the same again.

I felt that 17 years would have dulled my memory of ‘that’ moment, but it was so vivid that I felt the same cold shiver down my spine today, as I had then. If my scar of that moment is so fresh I cannot fathom what the families of those 2,977 souls that were taken away by a senseless act of terror would be going through today. My thoughts are with them.


The Sun has Risen but it Proves that Sunset is Required for Archaic Laws

Justice Indu Malhotra, who was a part of the 5-judge bench that took the decision on article 377, aptly said it in her verdict:

“History owes an apology to the members of this community and their families, for the delay in providing redressal for the ignominy and ostracism that they have suffered through the centuries. The members of this community were compelled to live a life full of fear of reprisal and persecution.”

The word “history” is important here because it took over 24 years for the legal system in India to repeal the provisions of Article 377, a law that was made in 1861 i.e. 157 years ago.

This repeal is a significant step towards legalizing people’s choice of a same-sex partner and allowing them to start a family by adopting children etc. So, while I celebrate for many of my friends who have been open about their sexual preferences regardless of the law, I fear that the marriage acts framed over 50 years ago will be a hindrance to their struggle for legitimacy. As demonstrated by the repeal of this law itself, it might take another decade to move the required changes through the legal framework of India and update the law.

I have long held a view that every law, be it civil, criminal, corporate or other, should come with a sunset clause i.e. they should be considered redundant unless they are reviewed and reinstated by an act of parliament, every 25 years. The world around us is changing rapidly and we still have over 300 acts that were made before 1947! In addition, there are laws governing commerce that were written when our nation was experimenting with socialism, and now are directly conflicting with the success we have achieved with capitalism & entrepreneurship.

Even the finance ministry brought in sunset clause for their schemes to “improve the quality of government expenditure”, proving that even the government believes there is merit in reviewing outdated laws from time to time. Therefore, all laws that are past their expiry date need to be rewritten to make them relevant for the era in which they are being used. This will significantly improve the quality of Indian law and justice, ensuring that “history” will no longer be apologetic to the citizens of free India.


Hats off Manjit Singh!!!

Amid all the din surrounding the Wizard of Omaha’s endorsement of Paytm’s pole position in the Indian Paymentech space, an endorsement which must be the proudest moment for any entrepreneur, but the day belonged to another Indian. This is the story of an Indian runner who has (reportedly) never won a gold in any national level race. He was considered the rank outsider in the 800m finals of the ongoing Asian Games in Indonesia, in fact, he was the second best Indian in the final. But what happened over the next 2 minutes is going to be remembered for a very long time.

Manjit Singh who hails from Haryana, came from nowhere to win the gold medal for India and pipped India’s best runner, Jinson Johnson to 2nd place. This gave India a very rare 1-2 finish at the Asian games. I could not find a better video of the proud athletes accepting their medals draped in the tricolour but it so rare a moment that even the poor quality video cannot take away its sheen.

Jai ho Manjit Singh & Jinson Johnson!!!


Learn from Elon Musk: be Careful of What you Promise Publicly!

The fiasco around taking Tesla private has dwindled Elon Musk’s credibility, making it hard to believe anything that comes out of his mouth. This brilliant piece of journalism aptly titled “Private’ mess: Elon Musk’s credibility goes from bad to worse” explains why this badly handled episode in Musk’s history can be considered a harbinger of worse things to come.

In fact, it is an important lesson for any founder who makes public statements of bravado in the pitching room or to the media- only promise what you can deliver because once that promise has left your mouth… it cannot be taken back.

…and by the way Mr Musk, I want my $1000 deposit on the Model 3 back!!!


Making Sense of the UPA vs NDA Economic Growth Debate

A heated political debate has been brewing between two accomplished lawyers, namely the last two finance ministers of India, P Chidambaram and Arun Jaitley. The debate began on the backdrop of the data released by the National Statistical Commission which stated that the GDP growth rate under the UPA was higher than the current GDP growth under the NDA government 

Of the various arguments that have been put forth by different parties of the political spectrum, I  resonate most with the arguments put forth by ET’s Saubhik Chakrabarti in the article “UPA vs NDA: Why higher growth doesn’t matter when followed by policy delinquency“.  

I believe that a lot of economic numbers achieved by UPA were because of the stable platform handed over by the Atal Bihari Vajpayee Government and the steroid (read: debt) fuelled hyper-growth of the worlds’ economy. The mirage of the strong economic power-house created by the UPA between 2004 and 2010 was blown away by the huff & puff of a crumbling world economy.   

UPA entrusted PM Modi with a country that was in turmoil: banks saddled with massive NPAs, high inflation, policy paralysis, low growth numbers, tax terrorism that was driving away FDI, Government-run SEBs that were out of money, runaway spending on thoughtless welfare schemes and most dangerously a demoralised & disillusioned class of entrepreneurs that had been maltreated by the government. UPA’s policies & constant infighting stifled any hope of supporting growth and innovation.  

I find myself sympathising with the Modi-led government because it braved strong headwinds in the global economy, maintained fiscal prudence and smartly bailed out the banking, power and manufacturing sectors from the brink of collapse, to bring India to the position of the world’s fastest-growing major economy. 

I believe that my contradicting views of the two governments are best represented by the contradicting mindset that I woke up with in these two time periods. When I woke up under the watchful eyes of the UPA government, I constantly felt that the worst was yet to come, however when I woke up today to write this post at 4 am, I was certain that the best our economy has to offer – has just begun!