ANNEXURE-IVA

PRIMARY PRODUCTS (Initial List)

All products covered under HSN 85.23, 85.32, 85.33, 85.36, 85.37, 85.40, 85.41, 85.42, 85.44, 8544.70, 85.46 and 8504.31.

ANNEXURE-IVB

PRIORITY INTERMEDIATE PRODUCTS (Initial List)

1. Input-Output Units including
all computer peripherals : HSN 8471.60

2. Computer Keyboard : HSN 8471.60.19.10
3. Computer Monitors : HSN 8471.60.19.20
HSN 8471.90.07

4. Populated PCBs
(All Categories) : HSN 8473.10

HSN 8473.30
HSN 8473.40
HSN 8504.90
HSN 8517.90
HSN 8529.90
HSN 8538.90
HSN 8543.90

5. Smart Cards & Accessories : HSN 8542.12

6. UPS for Data Processing HSN 8504.40
Equipment : HSN 8543.89
HSN 8471.90.05

7. Set-top-box with communication function and accessories: HSN 8517.80

8. Internet-box with user interface
and network interface : HSN 8517.80

9. Modems & ISDN Terminals : HSN 8517.50

10. Routers & Terminal Servers : HSN 8517.50

11. VSAT Terminals : HSN 8525.20

12. Radio Communication
Equipment : HSN 8525.20

ANNEXURE-V

GENERAL MEASURES RECOMMENDED BY THE DEPARTMENT OF ELECTRONICS TO REMOVE BOTTLENECKS IN THE GROWTH OF VENTURE CAPITAL FUND INDUSTRY

i) Section 10(23D) of Income Tax Act applicable to Mutual Fund should be extended to incoude Venture Capital Funds to bring them at par with Mutual Funds.

ii) To permit investment to be made in "Equity, Quasi-Equity and Loans which are part of the financial stucture" in place of the present dispensation which only permits investments in Equity to be eligible for benefit under Section 10(23F) of the Income Tax Act. The term "Computer Software" should be replaced by 'IT Products including IT Software and IT Services' in the explanation of the term 'Venture Capital Undertaking' appearing below Section 10(23F).

iii) Rule 2(d) of the Income Tax Act, 1962 should be modified to remove present time-bound investment schedules. It should be replaced by 'VCFs should invest 80% of the corpus in 4 years'.

iv) SEBI Guidelines should be changed to permit Mutual Funds to invest 5% of the corpus in Venture Capital Funds.

v) OTCEI should be revitalised to help small companies raise money from the public and also help Venture Capital Funds make an exit from the smaller companies.

vi) Facilitate exit by the Venture Capital Funds from the healthy companies through Buy-back of shares by the companies by introducing a Companies Bill.

vii) The present legislation may be replaced with a new "Limited Partnership Act" on the lines adopted in UK to facilitate formation of Venture Capital Funds.

viii) 50% of the funds invested by an investor into a VCF should be made tax-exempt.

ix) Rules under Indian Provident Fund Act should be changed to allow them to invest a small percentage, say 5% of the corpus, in the VCFs. Insurance companies which are also starting in the Private Sector should be asked to support Venture Capitals by making investments in VCFs.