At the Venture Intelligence APEX'07 event, an executive from a Fund-of-Funds that invests in India-based Private Equity (PE) funds remarked that his firm did not find much incentive to invest in Indian Venture Capital (VC) firms - as against later-stage PE firms - unless there were some specific tax breaks for the former. While the Finance Minister was unable to attend the event himself, someone from the ministry seems to have heard the LP's remarks - at least, partially. As PE and VC firms are considered pass through vehicles under SEBI regulations , they do not usually find a mention in the Indian government's budget . Which is why, I was taken by surprise when journalists started calling me for comments on the impact of the 2007-08 budget on the Indian PE industry. Tax proposal 173 in Mr. Chidambaram's budget speech says the following: Venture capital funds are a useful source of risk capital, especially for start-up ventures in the knowledge-intensive sectors.