Amendments in key labour laws coupled with the budget’s emphasis on SMEs and start-ups are sure to revitalize the business environment in India.Plan ahead to use them to your advantage.
The Modi-led NDA government on August 20th cleared some much-needed amendments to three critical laws in business sector. The Factories Act, Apprenticeship Act, and Labour Laws Act will undergo this revision, which looks very promising for the future of businesses in India.
The Factories Act will be amended to:
Increase overtime limit for workers to 100 hours
Improve worker safety
Intensify restrictions on night shifts for women in factories
Prohibit assigning of heavy machinery related work to pregnant women and physically challenged workers
Reducing paid annual leave eligibility criteria to 90 days (eligibility for entitlement of annual leave-with-wages)
Similarly, the Apprenticeship Act is gearing up to:
Include 500 new trades, along with ITES
Create “Skill India”, a teaching programmeto impart entrepreneurial and employment skills to the human-resource pool.
Delete the provision for arrest and imprisonment of employers who failed to comply with this act
The amendments in Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by
Certain Establishments) Act will allow firms with 40 or less employees to:
Cease complying to labour law regulations.
File a combined compliance report for 16 labour laws
The reforms, along with tax incentives in the form of investment allowance (the limit to which has been lowered to INR 250 million), will give SMBs of India a much-needed boost.
A better legal framework for easy exit from ventures has been proposed, but any steps in that direction are yet to be seen. In the meantime, entrepreneurship and start-ups will be encouraged; says the INR 100 billion allocated to fund start-ups and create idea incubation programmes on district levels across the country.
Our advice to SMBs: Make the best of it. Added investment in worker safety will pay off once you see the reduction in emergencies and penalties. Employ a better training program for your organization without the fear of arrest if you fail to permanently employ at least half of the apprentices; this way you are creating loyal employees trained in the manner of work you expect them to do
If you’re an entrepreneur and wish to move on to a new venture and close up an existing one, our advice is this: Wait a while for an easier exit. Here’s why…
Government has recognized the excess of bribery, red-tape, general waste of time it takes to shut down a venture successfully.A legal frameworkfor easier exit has been proposed in the budget, which will make the wait worthwhile.
All that red-tape and wasted-time may soon become objects of rueful reminiscence and you might just escape the hassle.
Article by : Payal Dinodia