Free India from the grip of regulations and compliances 

News: Recently, a report titled as “Jailed for Doing Business” was released by Observer Research Foundation (ORF) which referred to the laws and regulations regime in India – first ‘Impediments to Growth’. In addition, India’s Prime Minister used the occasion of the 15th Civil Services Day to point towards excellence in public administration  

What are the findings of the report? 

The findings have been divided into seven broad categories ranging from labour, finance and taxation, environment, health and safety to secretarial, commercial, industry-specific and general areas.  

India’s growth has been thwarted by stringent regulatory and compliance regime in India. There are around 69,233 unique compliances, of which 26,134 provisions can attract imprisonment for non-compliance. 

Therefore, starting and exiting a business is very difficult in India.  There is an excessive criminalization of India’s employer compliance which has led to breeding of corruption, blunts formal employment and poisons justice.” 

State-wise Pattern: Gujarat (1,469), Punjab (1,273), Maharashtra (1,210), Karnataka (1,175) and Tamil Nadu (1,043) have highest number of compliances with imprisonment clauses. 

The problem is worsened by the complicated administrative system. It adds to the regulatory woes.  

Measures Taken to simplify regulatory regime so far 

The Union government of India has abolished nearly 1,500 laws between the period from 2014 to 2019. 

The government should undertake broad-based policy reforms. There is a requirement for rationalizing business rules and regulations. It should include restrained approach on criminal penalties.  

The initiatives for deregulations and restructuring of the country’s compliance mechanism can improve the general business environment in India.  

The reforms will safeguard the dignity of wealth-creators, innovators, entrepreneurs and business leaders in India. 

The Prime Minister has made a clarion call to all the civil servants in the central as well as various states governments to kick off a comprehensive reform process. These reforms can take India to new heights of prosperity and well-being. 

Source: The post is based on an article “Free India from the grip of regulations and compliances” published in the Live Mint on 26th April 2022.