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Start – up India – A Campaign to Boost the Business in India

Introduction

Startup India is a drive initiated by the Government of India to build a strong eco-system for nurturing the innovation and Startups in the Country so as to take India a Step forward in becoming a developed Country. This shall be able to generate more employment opportunities alongwith the economic growth of the Country. It has given opportunity to many unemployed persons to come with their innovative ideas and designs.

Setting up Process

Startup definition for the purpose of Government Schemes, means an entity, incorporated or registered in India not prior to five years, with an annual turnover not exceeding INR 25 Crores in any preceding financial year, working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property. Provided that such entity is not formed by splitting up or reconstruction, of a business already in existence.

Further the entity shall lose its existence of Startup if in any preceding financial years it has achieved the turnover of INR 25 Crores or it has completed 5 years from the date of incorporation/registration.

The Startup entity can be incorporated in either of the following form:

- Partnership firm [ a duly registered partnership deed under the Partnership Act, 1932]

- Limited Liability Partnership [LLP] firm duly incorporated under the Limited Liability Act, 2008

- Private Limited Company incorporated under the Companies Act, 2013.

A proprietorship or public limited company is not eligible as Startup, whereas the One Person Company, being a Private Limited Company is entitled to be a Startup.

A business is deemed to be recognized as Startup only if it aims to develop and commercialize — a new product or service or process or a significantly improved existing product or service or process that will create or add value for customers or workflow.

For the ease of registration and other details regarding Startups the Government of India has launched the Startup India portal and mobile app w.e.f. 1st April, 2016, wherein the Action plan as to how startups have to go about doing business is completely provided.

Further to ease out the queries of the various startups the Government of India, Department of Industrial Policy & Promotion (DIPP) has release the Frequently Asked Questions (FAQs). The Government from every possible way is trying to reach out to the Startups to come up with their innovation and ideas.

The Government in order to do the proper hand holding for the startups have provided a complete action plan to the startups so that they can easily start their own ventures after duly fulfilling all the requirements.

In this regard The Ministry of Human Resource Development and the Department of Science and Technology have agreed to partner in an initiative to set up over 75 such startup support hubs in the National Institutes of Technology (NITs), the Indian Institutes of Information Technology (IIITs), the Indian Institutes of Science Education and Research (IISERs) and National Institutes of Pharmaceutical Education and Research (NIPERs).The Reserve Bank of India said it will take steps to help improve the ‘ease of doing business’ in the country and contribute to an ecosystem that is conducive for the growth of start-up businesses.

Startups Eligible for Startup India Tax Exemptions & Incentives

As reproduced before that a business is considered a Startup under the Startup India Action Plan if it aims to develop and commercialize new products or services…

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NCLT and NCLAT Rules 2016 – A Transformation in the Corporate Law Judiciary

The establishment of National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) is a paradigm shift in the corporate law judiciary with regard to the dispute resolution. The tribunals are established with the intention to adjudicate all disputes/issues pertaining to companies in India under one umbrella. The basic objective of constituting these tribunals is to provide a simpler, speedier and more accessible dispute resolution mechanism.

Constitution of NCLT and its Functioning

The Government of India, Ministry of Corporate Affairs vide Notification dated 1st June, 2016 announced the constitution of NCLT and NCLAT thus dissolving the Company Law Board under the Companies Act, 1956. The NCLT is a quasi — judicial body in India that adjudicates the issues related to Companies in India. The NCLT presently has eleven benches, two at New Delhi (one being the principal bench) and one each at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai.

The powers of NCLT under the Companies Act to adjudicate proceedings are-

- All the cases Initiated before the Company law board under the Companies Act, 1956

- All proceedings pending before the Board for Industrial and Financial Reconstruction, including those pending under the Sick Industrial Companies (Special Provisions) Act 1985;

- Appeals or any other proceedings pending before the Appellate Authority for Industrial and Financial Reconstruction; and

- fresh proceedings pertaining to claims of oppression and mismanagement of a company, winding up of companies and all other powers prescribed under the Companies Act.

Decisions of the NCLT may be appealed to the National Company Law Appellate Tribunal.

“NCLT shall have the powers to adjudicate all the proceedings held under CLB, BIFR and any appeals pending before Appellate Authority for Industrial and Financial Reconstruction, SICA and claims or proceedings w.r.t. oppression and mismanagement of a company, winding up of companies.”

The tribunal shall consist of a President and such number of Judicial and Technical Members as may be required. The principal bench shall be located at New Delhi which shall be presided over by the President. The powers of the Tribunal shall be exercised by Benches constituting of two members, one being the Judicial member and the other a Technical member.

Under the NCLT Rules, 2016 the tribunal shall have a President, Registrar and a Secretary. The President shall have the powers beside provided under the…

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The Real Estate (Regulation and Development) Act, 2016 – Effect on the buyer and developers of the Property

The Real Estate (Regulation and Development) Act, 2016 (‘Act’) which has received the President assent has given a long way to the Real Estate Industry to grow. The Act has given standardization norms for buyers as well as for developers which in return will be able to create a governed business practices in the Real estate Industry.

Need for Establishment of the Act:

The Act has been formed to establish a Regulator in the form Real Estate Regulatory Authority (RERA) which can keep an eye and regulate all the norms that shall be applicable on the Real Estate Industry. Further, the authority shall ensure sale of plot, apartment or building as the case may be, or sale of real estate project, in an efficient and transparent manner and also to protect the interest of the consumers in real estate sector. The Act also lay emphasis on establishing adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the RERA and the adjudicating officer and for matters connected therewith or incidental thereto.

The basic aim of the Act is to protect the buyers by providing a framework for reducing conflict with developers by RERA keeping a watch as the Real Estate Sector was unorganized and unregulated thus to rectify the alleged problem, a new set of norms, registrations, regulations and clearances are being created.

Brief Overview of the Act

The Act overall covers various provisions in order to address the weak areas of the Real Estate Industry in India, principally by establishing a disclosure framework and setting strict liabilities for developers and promoters irregularities.

“Real Estate (Regulation and Development) Act, 2016 established to regulate and keep an eye on all the norms applicable on real estate industry — setting up of RERA and real estate appellate tribunals.”

The Act lays down the setting up of RERA and real estate appellate tribunals in all states and Union Territories (except Jammu & Kashmir) within one year of its notification.

The Act provides for the mandatory registration of real estate projects with RERA where the total area of land proposed to be developed exceeds 500 square meters or more than eight apartments are proposed to be developed inclusive of all phases (where phase-wise development is proposed). It also mandates the registration of every phase of the project separately as a Standalone project and the projects cannot be advertised, booked or sold in any form prior to registration and obtaining necessary construction approvals. The RERA have to either grant or reject the registration applications within 30 days of the receiving of the application.

“Act to provide mandatory registration of real estate projects with RERA where the total area of land proposed to be developed exceeds 500 square meters or more than eight apartments are proposed to be developed inclusive of all phases.

Project disclosures to be made, defining of terms apartment, carpet area and rate of interest.

Promoters are mandated to park 70% of all project receivables in a separate account”

Further, the promoters/developers of the ongoing project for which the completion certificate is not yet issued shall make an application to the RERA for registration of the said project within three months from the date of the commencement of the Act.

Under the Act it is being mandated to provide the publicly accessible disclosures of the project and promoter details, alongwith a self-declared timeline within which the promoter is required to complete the project. Quarterly project related disclosures also required and all the disclosures are required to be made online available.

The Act clearly defines certain terms such as…

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Insolvency and Bankruptcy Code 2016 – A dawn in the era of Credit Market Laws

A transformation in the Indian Economic reform with the passing of the Insolvency and Bankruptcy Code 2016 (hereinafter referred as ‘Code’) with regard to the functioning of the credit market in India. This shall provide a big boost to Ease of doing business in India. The law has been enacted with a vision to encourage entrepreneurship and innovation which will further boost the startups in India. This is an another government initiative to enhance the startups in India.

The code is a comprehensive and systematic reform which shall give a significant increase in the functioning of the credit market in India and would take the country from among relatively weak insolvency regimes to becoming one of the world’s best insolvency regimes.

Background

The Insolvency and Bankruptcy Code 2015 was introduced by the Finance Minister in Lok Sabha in December 2015 and was subsequently referred to Joint Committee of

Parliament. Thereafter the committee submitted its recommendations and the modified code was accordingly passed in the Lok Sabha on May 5, 2016. The code creates a framework for resolving insolvency in India. Insolvency is a situation where an individual or a company is unable to repay the outstanding debt.

The Code repeals the Presidency Towns Insolvency Act, 1909 and Provincial Insolvency Act, 1920. In addition, it amends

11 laws, including the Companies Act, 2013, and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, among others.

Insolvency and Bankruptcy Code 2016 — A brief Overview

The Insolvency and Bankruptcy Code 2016 has been enacted to consolidate and amend the laws relating to reoganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.

Applicability:

Any company incorporated under the Companies Act, 2013 or under any previous company law.

Any other company governed by any special Act for the time being in force.

Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008.

Any other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf.

Partnership firms and individuals.

Objective

The objective of the code is to promote entrepreneurship, availability of credit, and balance the interests of all stakeholders by consolidating and amending the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner and for maximization of value of assets of such persons and matters connected therewith or incidental thereto.

The law strives to consolidate the laws relating to insolvency of companies and limited liability entities (including limited liability partnerships and other entities with limited liability), unlimited liability partnerships and individuals, presently contained in a number of legislations, into a single legislation. Such consolidation will provide for a greater clarity in law and facilitate the application of consistent and coherent provisions to different stakeholders affected by business failure or inability to pay debt.

Setting up of the Authority

The code proposes the setting up of new entity, the Insolvency and Bankruptcy Board of India, which will regulate insolvency professionals and information companies — those which will store all the credit information of corporates.

Further, the code proposes two authorities to deal with insolvency — The National Company Law Tribunal will adjudicate cases for companies and Limited Liability Partnerships and the Debt Recovery Tribunal will do the same for individual and partnership firms.

Salient features of the Code

Insolvency Resolution Process — the code specifies similar insolvency resolution processes for companies and individuals, which will have to be completed within 180 days. This limit may extend to 270 days in certain circumstances. The resolution process will involve negotiations between the debtor and creditors to draft a resolution plan.

Fresh Start process — the code provides a fresh start process for individuals under which they will be eligible for a debt waiver of up to Rs. 35,000/-. The individual will be eligible for…

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CBDT amends Income-Tax Act to simplify TCS credit for Salaried Employees

With this amendment, it may be inferred that various such individuals will now have the option to claim TCS credits against tax liabilities. Thus, it will prove particularly advantageous for individuals encountering expenses pertaining to overseas travel and education.

Key Highlights of the Amendment

Claiming the TCS Credits

The amended tax regulations now permit a different individual to accumulate the TCS Credit, apart from the original payer. This reform will enable parents or legal guardians, who have paid TCS for their children’s tuition fees abroad, to transfer the credit to their own tax returns.

With this move, it will now provide flexibility to lessen the financial burden on families.

This enables employees to claim tax collected for their overseas tour package and reduce the TDS burden on their salary instead to wait for the filling of the income tax return that happens only next year.

How can one claim the TCS Credit?

The collectee who made the payment must provide a declaration to the tax collector (such as a bank or institution collecting the TCS). This declaration should specify that the credit should be applied to another person’s PAN.

Introduction of new Form 12BAA

In the lieu of the above amendment, CBDT has unveiled a new Form 12BAA as per notification No. 112/2024 dated 15th October 2024, designed for the reporting of non-salary income and the inclusion of TCS details. These forms…

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Brexit – An Open Challenge for The Indian Economy

Brexit is the withdrawal of the United Kingdom (UK) from the European Union (EU), it refers to the June 23, 2016 referendum by British voters to exit the European Union. The referendum quivered global markets, including currencies, causing the British Pound to fall to its lowest level in decades against a basket of other global currencies. The supporters of Brexit had based their opinion on a large number of factors ranging from the global competitiveness of British Businesses to concerns about immigration. Popular support of Brexit had varied over time, but the 23rd June vote demonstrated that UK citizens believed that Great Britain can survive without being part of the EU and the related benefits that arose for the UK out of being a member of the EU.

Economic Effects

With the advent of globalization there is more correlation seen between the countries. If there is a disturbance in one country, it will have an impact on the world economy as a whole and especially when the country is one of the developed economies that has the major control over the trade and other economic functioning. Thus it can be seen that the Brexit will have an impact on the global growth. It is all together a big blow when one can see that more countries are moving towards the multilateral trade agreements. It will also estrange the investors and the capital which will move from risky markets to safer havens.

Prior to the 2016 referendum, the UK treasury estimated that being in the EU has a strong positive effect on trade and as a result the UK’s trade would be worse off if it left the EU. The Brexit impact is not only limited to Britain, but also European countries. London has always been financial hub, which gave access to capital markets of the world to Europe. But with Brexit, European Union may have restricted access to the London Financial Market. In all likelihood, access to this market will form a key part of trade negotiations. It will then take two years or more to work through exit modalities, a time in which a lot of things can be brought back to normal, including trade relations.

The major exporting countries such as China and India may get affected as EU is one of the major export market. The referendum rode on many components — anti immigration, increasing protectionism etc. and it is expected that these sentiments will increase in other parts as well.

Impact on India

UK has always been the gateway for Indian Companies to access the European companies due to its access to financial markets in London and ease of doing business with Europe, from UK. India has shown a positive trend towards trade surplus of $3.64 billion in terms of bilateral trade with Britain. The total trade stood at $14.02 billion in FY16, out of which $8.83 billion was in exports and $5.19 was in imports.

For the month of April 2016 the exports to Britain stood at 17.66%(USA 17.80%) of the total exports. In terms of imports, India imports only 1.45% of its net imports from UK. If we look at exports from India to UK, the major exports are textiles and clothing, followed by machinery and auto ancillaries. India’s major exports in terms of pharma are US, UK followed by Europe.

Macroeconomic Impact

Brexit is unlikely to have a notable impact on India GDP Growth in fiscal 2017 and it is forecasted a growth of 7.9% due to the agriculture sector as swing factor. It’s the spatial and temporal distribution of rains in July and August that will matter more to the domestic growth. It is also observed that there shall be not much downside to India’s Exports. UK basically accounts for 3% of merchandise exports from India. Further, India’s total trade (exports and imports) with UK is 2% of its external trade.

It can be seen that the rupee may weaken at per dollar by the end of the fiscal year. Changes in the value of rupee with regard to the pound won’t be the only factor determining India’s trade competitiveness with Britain. The currency movements of India’s trade competitors with respect to the pound, along with changes in domestic costs and productivity, will be another factor. Also expected that there will be intermittent mini fights as Brexit negotiations proceed as the same shall be treated as a process instead of negotiations which will take some time, and Article 50 which makes the provisions for countries that want to leave the European Union (EU), has not been invoked by Britain yet.

“India shall see a notable impact of Brexit which shall be related to trade, capital flows, immigration and free border access to the Indian Companies to operate in UK.”

India is the third largest source of FDI in UK with Britain having more than 800 Indian Companies. With Brexit, the business of these companies may be affected and due to the exchange rate fluctuations the bottom line of these companies may suffer.

As India considers Britain as a gateway to…

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Masala Bonds – A New-fangled way of raising money

A term which has recently gained momentum in the financial market is termed as Masala Bonds. They are the bonds issued outside India but denominated in Indian Rupees, rather than the local currency of that country. They are named after the Masala Spice, a mix of spices used in India. Unlike dollar bonds where the borrower takes the currency risk, masala bond investors have to bear the risk. The first Masala Bond was issued by the World Bank backed International Finance Corporation in November, 2014 when it raised Rupees 1000 crore bond to fund infrastructure projects in India. Later in August 2015 International Finance Corporation for the first time issued green masala bonds and raised Rupees 3.15 billion to be used for private sector investments that address climate change in India.

About Masala Bonds

“Masala Bond is a kind of financial instrument through which Indian entities can raise money from overseas Markets in rupee and not in foreign currency. Indian rupee denominated bonds issued in offshore Capital markets.”

Masala Bond is a kind of financial instrument through which Indian entities can raise money from overseas markets in the rupee and not foreign currency. These are Indian rupee denominated bonds issued in offshore capital markets. The rupee denominated bond is an attempt to shield issuers from currency risk and instead transfer the risk to investors buying these bonds. In a way Masala Bonds is a step to help internationalize the Indian rupee. Investors in these bonds however will have a clear understanding and view on the Indian rupee risks. Therefore, stable Indian currency would be key to the success of these bonds.

The currency risk in the Masala Bonds lies in the hands of investors thus the investor demands a currency risk premium on the coupon and hence borrowing cost for Indian corporates through this route would be slightly higher. However, it may still be cheaper if one considers the currency risk. Though raised in Indian currency, these bonds will be considered as part of foreign borrowing by Indian corporate and hence would have to follow the RBI norms in this regard. Under the automatic route, companies can raise as much as Rupees 50 billion per annum through Masala bonds.

Pricing of Masala Bonds

There are two critical factors for the success of such bond : (a) coupon rate and (b) liquidity of Indian currency. India is rated BBB- by global ratings agencies — a notch above junk rating. Sovereign rating will influence pricing of these bonds. HDFC, for example, had recently borrowed in the domestic market through a three-year bond at 8.35%. HDFC expects to fix a coupon rate at least 10 basis points lower than the domestic rate for the masala bonds. It was observed that Indian banks were borrowing US dollar-denominated loan at under 4% in later half of 2015. If HDFC were able to issue masala bonds at 8.25%, it would imply a currency risk premium of above 4% per annum. Overseas investors are yet to decide their preferred coupon rate for the Indian masala bonds. Generally, given the view on Indian currency, investors are expecting a higher coupon from the issuers, which may make these bonds costly for Indian borrowers. This is the main reason holding back issue of masala bonds. If US Fed increases interest rate, that would make Indian masala bonds less attractive.

Allowing Indian firms to raise rupee-denominated loan from overseas market is a step towards full convertibility of Indian currency and the Indian central bank is supportive of this experiment. Despite initial glitches on pricing, masala bonds have potential to raise $5 billion in next two years. British government is wooing masala bond issuers and would like to position London as the global hub for offshore rupee financing.

The success of masala bonds would demonstrate overseas investors’ confidence on Indian currency. In other words, successful issue of these bonds by Indian corporate would imply faith on country’s macroeconomic fundamentals and the central bank’s role in currency management.

Regulatory Regime for Masala Bonds

The Reserve Bank of India (RBI) has paved the way by permitting the issuance of rupee — denominated bonds as part of its Fourth bi-monthly Policy statement for the year 2015–16 on September 29, 2015. While the RBI pronounced on the issue from the perspective of foreign exchange regulation, particularly that governing external commercial borrowings (ECBs), several other issues…

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Model GST Law – A Tax Law Transformation

The much awaited reform Goods and Service Tax Act 2016 will change the fundamental of Indian Taxation. The state wise VAT, the central excise, the service tax, all will be integrated into one legislation, known as Goods and Service Tax Act, 2016 (‘GST Act 2016’). The GST Act 2016 has been for the first time made public in June 2016 by the Indian Government. The government is planning to introduce the Act w.e.f. 1st April, 2017 and proposes to pass the 122nd Constitutional Amendment bill, 2014 in the upcoming monsoon session of the parliament. By amalgamating a large number of Central and State taxes into a single tax, it would mitigate cascading or double taxation in a major way and pave the way for a common national market.

The framework of GST is characterized by a marked shift from the present origin based taxation to that of consumption based. It is proposed to be levied on a wide base of goods and services and is likely to subsume a majority of existing taxes — excise duty, service tax, VAT, Central Sales Tax (CST), purchase tax, octroy, local body tax etc. Only few services of public importance are kept outside the purview of GST. The regime is expected to have an equally conducive regulatory effect on Foreign Direct Investment (FDI), allowing foreign manufacturing companies to also be able to reap benefits and thereby, steadily build confidence in investing in India. The transition to GST may change the way business is done in India and is widely expected to boost the country’s economy.

Background

The Constitution (122nd Amendment) bill, 2014 was introduced in Lok Sabha on December 19, 2014 and was passed in the House on May 6, 2015. Further, it was referred to a Select Committee of Rajya Sabha on May 14, 2015. The Bill amends the Constitution to enable Parliament and State legislatures to frame laws on the imposition of the Goods and Service Tax (GST). Consequently, the GST subsumes various central indirect taxes including the Central Excise Duty, Countervailing Duty, Service Tax, etc. It also subsumes state value added tax, octroi and entry tax, luxury tax etc.

The idea behind GST is to subsume all existing central and state indirect taxes under one value added tax, which will be levied on all goods and services. No good or service is exempt, and there is no differentiation between a good or service, whether as an input or as finished product. Under GST, tax paid on inputs is deducted from the tax payable on the output produced. This input credit set off operates through the manufacturing and distribution stage of production. The tax is collected only at the place of consumption. This design addresses cascading of taxes.

“Implementation of GST in India will integrate the existing line of taxes like Central Excise, Service Tax, Sales Tax, Value Added Tax etc. into one tax i.e. GST. Thus it will help to reduce or eliminate the multiple taxes currently being levied on products and services.”

Key Features

GST will create a single, unified Indian market to make the economy stronger. The basic aim of GST is to benefit the consumers as well as the Government, thus creating a win win situation for both. Some of the important features are-

The GST shall have two components: one levied by the Centre (Central Goods and Service Tax) and other levied by States (State Goods and Service Tax). Rates for Central GST and Sate GST would be prescribed appropriately, reflecting revenue considerations and acceptability. This dual GST model would be implemented through multiple statutes. However, the basis features of law such as chargeability, definition of taxable event and taxable person, measure of levy including valuation provisions, basis of classification etc. would be uniform across these statutes as far as practicable.

Ending of Multiple Layer of taxes — Implementation of GST in India will integrate the existing line of taxes like Central Excise, Service Tax, Sales Tax, Value Added Tax etc. into one tax i.e. GST. This will help in avoiding multiple taxes currently being levied on products and services.

Alleviation of Cascading taxation — Under the GST regime, the final tax would be paid by the consumer of the goods/services but there would be an input tax credit system in place to ensure that there is no cascading of taxes. GST would be levied only on the value added at every stage, unlike the present scenario wherein tax is also required to be paid on Tax in a few cases i.e. VAT is payable on Excise Duty.

Development of National Economy — With the introduction of a uniform taxation law across states and different sectors in respect to indirect taxes under GST, would make it easier to supply goods and services hassle-free across the country. This will not only help in removing economic distortions, promote exports and bring about development of a common national market but will also enhance tax — to — gross domestic product ratio and thus help in promoting economic efficiency and sustainable long term economic growth.

Increase in voluntary compliance — Under the GST regime, the process will be simple and articulate with a lessor scope for errors. As all the information will flow through the common GST network, it would make tax payment and compliances a regular norm with lessor scope for mistakes. It will only be upon the payment of tax, that the consumer will get credit for the taxes they pay on inputs. This will generate an automatic audit trail of value addition and income across the production chain, creating a unified base of tax…

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The Maternity Benefit (Amendment) Bill, 2016 – A Transformation in the Labour Law

The much awaited transformation in the Labour Law empowering women employment, the Maternity Benefit (Amendment) Bill was passed by Rajya Sabha on 11th August, 2016. While the bill is yet to be passed in Lok Sabha. The bill highlights the increasing the period of maternity leave from 12 to 26 weeks for Organized Formal Sectors.

The Bill amends the Maternity Benefit Act, 1961. The Act regulates the employment of women during the period of child birth, and provides maternity benefits. The Act applies to factory, mines, plantations, shops and other establishments. The Bill amends provisions related to the duration and applicability of maternity leave, and other facilities.

Highlights of the Maternity Benefit (Amendment) Bill, 2016

Duration of Maternity Leave — The Act states that every woman will be entitled to maternity benefit of 12 weeks. The Bill increases duration to 26 weeks.

2. Under the Act, the maternity benefit should not be availed before six weeks from the date of expected delivery, the bill changes to eight weeks.

3. In case of a woman who has two or more children, the maternity benefit will continue to be 12 weeks, which cannot be availed before six weeks from the date of the expected delivery.

4. Maternity leave for adoptive and commissioning mothers: The Bill introduces a provision to grant 12 weeks of maternity leave to: (i) a woman who legally adopts a child below three months of age; and (ii) a commissioning mother. A commissioning mother is defined as a biological mother who uses her egg to create an embryo implanted in another woman.

5. The 12-week period of maternity benefit will be calculated from the date the child is handed over to the adoptive or commissioning mother.

6. Option to work from home: The Bill introduces a provision that states that an employer may permit a woman to work from home. This would apply if the nature of work assigned to the woman permits her to work from home. This option can be availed of, after the period of maternity leave, for a duration that is mutually decided by the employer and the woman.

7. Crèche facilities: The Bill introduces a provision which requires every establishment with 50 or more employees to provide crèche facilities within a prescribed distance. The woman will be allowed four visits to the crèche in a day. This will include her interval for rest.

8. Informing women employees of the right to maternity leave: The Bill introduces a provision which requires every establishment to intimate a woman at the time of her appointment of the maternity benefits available to her. Such communication must be in writing and electronically.

Need for the Transformation in the Law

With the rise of Nuclear family concept in India and with that the social and family support is decreasing for young parents. This has become one of the major reason why more and more young and progressive women have to give up their career, which in turn proves a huge loss to society. Thus, the government taking into consideration this fact has made provision to increase the maternity leave from 12 weeks to 26 weeks for all organized formal sectors covering women working in both public and private sectors.

However, one such drawback which can be seen is that the women in the Unorganized Sector won’t be benefitted from Maternity Benefit Act Amendment Bill, 2016. So, the women who work from home (whether they are freelancers or work at small establishments like rolling bidis etc) and work without a fixed employer are left out. Yes, working women without fixed employer have been left out from the bill completely.

The amendment recognises the economic rationale of women’s participation in India’s economy. Innumerable studies have highlighted the importance of involving half of India’s population in measurable economic activities. Today, women contribute only 17 percent to India’s GDP against a global average of 37 percent (source: McKinsey). Countries like Norway, Sweden or Denmark, that have one of the world’s highest median per capita income, also have the highest female labour participation rate, higher than 70 percent. If India can increase its women participation in labour force by 10 percentage points by 2025, it could increase its GDP by16 percent (source: Catalyst). A study by Booz and Company estimates that if men and women in India were to be equally employed, its GDP could go up by 27 percent. For a family, double income helps them to fulfil their economics needs and social aspirations while single women need it as a cushion against economic adversity. Therefore, household bound non-employed women who are finding it difficult to work are an economic concern that needs to be fixed.

Other Major Amendments and their impact

For a Mother of Two, the Maternity Leave remains 12 weeks — Its sheer discrimination for the third child. 26 weeks isn’t for the mother of two or more. So, a mother of two will only have 12 weeks leave. So, while, the maternity benefit amendment bill 2016 favors the first and second child. Yes, the child will face discrimination and will also be deprived of dietetic benefits of breastfeeding. The mother can avail the leave…

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