When Angels fall : Budget 2012 and the story of LaLa Land

[Editorial notes: The startup tax imposed by Indian government is a great attempt at killing the startup ecosystem in India. Here is a guest article that pretty much speaks on behalf of the Indian entrepreneurs.]Angels-and-Demons-Tax-on-Angel-Investment-Budget-2012

Let me begin with a story today.

Long, long ago a king ruled over LaLa Land. He was known for his wisdom and knowledge. He had been to the most renowned knowledge centres of the world to learn about the intricacies of government.

When he took over the throne after his father’s retirement, his people thought that they have finally found a knowledgeable and worthy king.

In his kingdom there was a demon that used to eat little children. Every evening this demon would enter the city and hunt for a child to satisfy his hunger. He would destroy everything that came in his way- bridges, temples, farms, almost everything. Prior attempts to kill this demon had failed miserably as this demon had been blessed with the power of a hundred thousand army.

The state exchequer was almost going bankrupt due to this constant outflow of money towards rebuilding the places which this demon had destroyed. His subjects were crying for help.

The king decided to solve this problem once and for all. To prevent the demon from coming to the town, he gave his people 3 choices:

  • Stop having kids
  • Kill your own children and live peacefully in the kingdom
  • Settle in some other kingdom with your kids.

With no children left in the kingdom, the demon would definitely stop visiting the town- so thought the king.

His subjects were flabbergasted with the choices offered but nobody dared to question the king. Majority of them ruled out option 1 and 2 and migrated to other kingdoms in search of a new home.

But the demon refused to budge. In the absence of any more children, he started devouring anything that he could lay his hands on.

Few years down the line, LaLa Land wore a devastated look. Everything was destroyed and with no more children in the kingdom any hopes of revival were also ruled out.

Cut to 2012, India!

Is fiction trying to find a replica in facts?

The clause in the Union Budget 2012, which proposes to tax angel investments, is an attempt by the government to prevent the ‘demon’ of black money and corruption from harming the system further. But on the flipside, it is almost like asking entrepreneurs to kill their own ‘children’ or to find greener pastures.

Honorable Majesty! We value your knowledge…but can you please give it a second thought!

[Guest article contributed by Shilpi Choudhury of Discountpandit. Reproduced from the blog.]

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