Goyal recommended that a small group of startups can create a self-regulatory mechanism before the government starts interfering
He pointed out that while the government should stay out of regulating startups, it is ‘incumbent’ that the Centre tries to create some framework
Citing the example of the country’s IT sector, Goyal noted that it fared well with minimum government intervention
Startups should be governed by a self-regulatory mechanism, said Union Minister of Commerce & Industry, Piyush Goyal, adding that the government is not keen on stepping in with regulations.
He pointed out that while the government should stay out of regulating startups, it is ‘incumbent’ that the Centre tries to create some framework to have orderly growth in the sector. Goyal said, “It will be good if we can ensure startups are given a free runway to grow and prosper.”
Speaking at the Startup20 Shikhar in Gurugram, Goyal said he has been in talks with prominent lawyer Nishith Desai over regulations for startups. “He spoke to me four or five years ago and said the potential is huge, and the government shouldn’t intervene.”
The minister also recommended that a small group of startups, led by Desai, can create a self-regulatory mechanism before the government starts interfering in their business or circumstances go out of control. “It will be a good idea if we address this challenge up front,” he added.
Citing the example of the country’s IT sector, Goyal noted that it fared well with minimum government intervention.
“Today, it’s the mainstay of a large part of our international trade and business. I do see the startup ecosystem intersecting with the IT sector, particularly with the new-age world of AI and quantum computing,” he added.
The laws applicable to unlisted companies apply to Indian startups as well, as there are no specific laws or regulatory bodies for them.
However, they are stakeholders in multiple industry bodies. One such body includes the Internet and Mobile Association of India (IAMAI), which recently saw a leadership reshuffle, putting Dream11’s Harsh Jain at the helm.
Goyal’s comments come amid several corporate governance issues coming to light across big-name Indian startups. The likes of BYJU’S, GoMechanic, Trell, Mojocare, Zilingo and BharatPe have all witnessed corporate governance issues recently.
Having assumed leadership of G20 this year, India introduced Startup20 to promote startup culture among the G20 countries. So far, India has organised three Startup20 events in Hyderabad, Sikkim and Gurugram.
