The Indian risk capital industry had investments of $9.3bn in 2011. But it is feared the taxation proposals in Budget 2012 will create roadblocks to future growth. This piece, first published by The Economic Times of India, explains why the right policy framework can boost risk capital inflow to $200bn by 2020.

China and India are the cynosure of all eyes as the two fastest-growing major emerging economies with extremely large domestic markets across sectors.

While China has emerged as the global epicentre of entrepreneurship, venture capital and private equity investing, India is signifcantly behind on all metrics.

Between 2006 and 2011, there were more than 5,600 venture capital and private equity transactions in China involving investment of nearly $107bn.

India saw investments of only $54bn in 2,400 transactions during…