Mumbai, Apr 27 (KNN) The start-ups have great appetite for funds in their growing phase and lion’s share of the funding has been coming through foreign investment, mostly venture capital or private equity funds, said Deputy Governor of Reserve Bank of India (RBI) BP Kanungo.

Speaking at the FEDAI annual conference at Beijing, the Deputy Governor of RBI said “We have taken some steps in the past to facilitate fund raising by start-ups, but we will remain alive towards their evolving needs including easing the compliance burden.”

Several start-ups, including individual entrepreneurs invest in India through a holding company overseas primarily because of the ease of raising capital in a foreign jurisdiction, whereas the economic activity is located in India, generating employment, revenue and economic value, he added.

Kanungo said “We, along with the Government of India shall take a relook at any misgivings about regulatory regime in this regard and take necessary corrective action.”

In addition, he pointed “We also must notice that economic prosperity has almost always been inextricably linked with international trade and commerce (capital movements are recent phenomenon). The need for free trade and commerce became important as the industrial revolution greatly increased productivity.”

Despite the fact that global economic growth and growth in global trade have moved in tandem over the past two centuries, arguments in favour of import substitution, selective protection, subsidies abound.

One can perhaps reasonably conclude that while the global objective will continue to be less restrictive trade, local variations will have to be considered keeping in view other macroeconomic factors like fiscal policy, exchange rate policy, employment policy, and so on, said Kanungo.