Omidyar's Jayant Sinha: Volatile Government Policy is a Deterrent to Investing

Image: Vikas Khot

Jayant Sinha
Age: 48
Profile: Partner and managing director, Omidyar Network India Advisors
Career: Was a partner at McKinsey and Co; Managing Director, Courage Capital
Management
Education: MBA with distinction from Harvard Business School; MS in Energy Management and Policy, University of Pennsylvania; and BTech with Distinction from IIT, Delhi
Hobbies: Tennis, writing, public affairs

Q. Could you tell us a bit about Omidyar Network’s current portfolio in India?
The Omidyar Network got launched in India two years ago. At that time we said we would be investing between a $100 and $200 million over five years. We are very much on track. We have 24 organisations in India that we support, both for profit and non-profit, and we have invested almost $100 million in them. About 70 per cent of that is in for-profit organisations.

Our overall objective is to be able to help improve the lives of millions of people and we find that we can do that with many for-profit organisations. There are also great non-profit organisations that are scaling. You find good opportunities on both sides.

Q. Is it possible to support a non-profit organisation beyond a certain scale?
Our approach is that of venture philanthropy. We try to find organisations that are at the point of scaling up, at an inflection point, where our support—whether it is financial, human capital or strategic—is such that it takes them to the next level in their ability to scale. Then we work with them just like a venture capital to help them scale up to a level where they are sustainable by themselves. Then our support will stop. We could play a catalytic role but not indefinitely support them. For a non-profit organisation that means having a robust and sustainable donor base or earned income from, say, selling knowledge products.

Q. Is it becoming riskier to invest in India, particularly because of government policies or interventions such as that happened with microfinance in Andhra Pradesh some time ago?
You are quite right. You either find that often government policy is not present or if it is present, it is very volatile or arbitrary. It is a major risk factor for us. For example, in education there are certain regulations that are operating in terms of the right to education and so on that make it very difficult for certain types of organisations to succeed. It is a real deterrent to investing when you have policymaking that is as capricious and volatile as it is [now].

Q. Is it increasing?
I would say, yes. It is (increasing). Over the last several years, government micro-management of the economy has gotten more extensive and it is not a good thing to do. You have to put in regulatory safeguards and appropriate competitive environment where ultimately the market can be self-regulating. That requires a certain enlightened and light-touch regulation which, we find, in certain sectors has corroded away.