That the regulations governing venture capital funds should be simplified and made easier for these funds to come to India, was one of the thrust areas of the members involved with framing recommendations which can be brought about in the governance of these funds.

Mehta said that there was a need to promote the concept of venture capital in a big way so that scientific ideas could be converted into commercial production. ``This is the only concept which ensures that scientific ideas come into reality and private entrepeneurship gets promoted,'' said Mehta.Mehta said that the guidelines should be such that a registered venture capital fund should be treated as a foreign institutional investor (FII) with an automatic flow of funds. ``The rules for exit ofthese funds from India also need to be simplified,'' he said.

``The guidelines should be on the same pattern as of mutual funds i.e. once the mutual fund is recognised by Sebi, than the mutual fund is automatically entitled to various tax benefits without any additional conditions. The venture capital fund should be treated on the same lines with automatic tax benefits,'' said Mehta.

The recommendations for the changes that are to be made in tax laws will be made available to the government shortly and the changes that are to be made in Sebi guidelines for simplification of procedures will be framed shortly, said Mehta.

Mehta said that if venture funds were treated as FII investment and got automatic approvals instead of the current procedure of FIPB approval, a large number of funds would flow into India. ``If somebody is willing to take the risk then why not allow them?'' said Mehta, adding that, ``It is because of the current procedures that today there are only 9 venture capital funds and there areonly 9 applications pending with Sebi for approval,'' said Mehta. ``The exit route valuation is also a major area to be looked into. These firms should be allowed to sell and exit whenever they want to,'' said Mehta.

Citing the example of American markets, Mehta said that the venture capital industry had helped the industry to boom there.