- Ever since the Bharatiya Janata Party’s Narendra Modi government assumed the mantle of administering the Union Government under the aegis of the National Democratic Alliance, the Indian economy has made definite progress, as the available statistics indicate. The purchasing power parity has seen a significant improvement, aligning with the nation’s aspirational aspects as it seeks to rub shoulders with the best in business. To achieve its avowed objective of becoming one of the most developed nations by 2047, the Modi government has initiated several measures over the last decade. What needs to be assessed is whether the ease of doing business has been accorded primacy to achieve the intended objective by deregulation. Let’s dwelve.
PC: YouTube OTV
- Most importantly, the Union Government’s push for deregulation to ensure business conducive environment is created deserves an earnest assessment. Mind you, this will allow the economy a huge boost. As reported, a whisker separates India from Japan, and the 4th largest economy rank, as we step into 2026. But it’s fair to mention that India reached here despite, not because of, its policies. Recall how, in 2004, enforcing a contract took 425 days on average, with 40 procedures. Insolvency resolution easily stretched to 10 years. Even in 2017, a Niti Aayog report said setting up shop in India required 118 days on average, with the wait stretching to 248 days in Assam. Things are better now, but only relatively.
PC: The Economist
- An abundance of regulations continues to be the proverbial spanner in business wheels. So, the PM’s advice to the top bureaucrats, to set up deregulation cells for speeding up reforms and improving ease of living and doing business, demands undivided attention. Undeniably, regulation has its place in a modern society. We wouldn’t have had seat belts in cars without it, nor the Aravalis. But the problem is that too many regulations and layers of operational conditions are piled, and policies become complicated and incomprehensible. The reams of quality control orders (QCOs) Indian published after 2017 are just one example of this problem. Excellent in theory, intended to keep out substandard and hazardous imports, but the orders became a hurdle.
PC: Moneycontrol
- Notably, the steel ministry alone had over 150 of them. Importing raw materials at the right price became difficult, hurting domestic manufacturing’s competitiveness. That’s why regulations should be imposed sparingly, only if they pass the test of necessity. And those that make no sense, or have crossed their best-by date, like most QCOs, should be scrapped. The government has pressed this point throughout the year, with the FM announcing a regulatory reform panel to promote ease of doing business in the Budget. The CEA has also said deregulation is the next focus area for India. The SMEs need deregulation the most since it is the biggest job creator, but it is hamstrung by costly compliance. The govt must lift its foot off the regulatory brake forthwith.
