Government to ease Labour Laws for start-ups

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Given the start-up revolution that is currently underway in the country, the government is keen to boost it, ensuring that start-ups enjoy certain privileges and exemptions. A proposal mooted by the central government could exempt start-ups from certain existing labour laws. Given the fact that most of them are bootstrapped, adhering to labour laws could be cumbersome, which is why the government is keen on making the initial phase easier. Under the proposal, states have been requested to ease their labour laws for start-ups. A total of 10 states have decided to implement the proposal, with the others awaiting more clarity.

Simpler norms for start-ups on the anvil
simpler norms for start-ups on the anvil

The primary purpose of these privileges is to ensure that start-ups do not face major legal hurdles during their initial days. In the past, a number of companies have faced issues with government labour laws, impacting the growth of the sector. The government aims to give an impetus to start-ups by streamlining certain regulations. This move follows a decision to exempt start-ups from 9 existing labour laws during their initial stages, which was taken in March last year.

Start-up stats – India

Reports indicate that India is home to over 19,000 start-ups, with this number increasing every year. As per data released by the Economic Survey 2015-2016, 19,000+ technology-backed start-ups are functioning in the country, with over $3.5 billion raised in 2015 itself. The country ranks third globally when it comes to the number of start-ups, with the USA and UK heading the pack. Bengaluru tops the chart when it comes to city preference, with close to 26% of the start-ups located in the city, with New Delhi and Mumbai being the other preferred cities.

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