Self-declaration on labour to boost entrepreneurship, employment

The Union Ministry of Labour and Employment's recent decision to allow start-ups to submit online self-declaration instead of inspection under six labour laws is expected to benefit micro, small and medium enterprises (MSMEs) in a big way. CRISIL believes such measures allow start-ups to focus on their business rather than worry about compliance requirements.

A CRISIL survey of 5,800 rated MSMEs shows the employment generating potential of a start-up is around 38 employees per enterprise - less than half that for established units. It takes a while for an enterprise to provide employment to nearly 100 employees.

The government's initiatives to spur entrepreneurship and business in the country - such as 'Make in India', 'Start-up India', 'Stand-up India' and measures to improve ease of doing business - are expected to create enormous opportunities for the MSME sector (the second largest employment generator in the country), helping them scale up faster and improve their employment potential. To recall, India's ranking in the World Bank's Doing Business 2016 report has improved to 134, from the earlier 140.
Source: CRISIL-rated MSMEs