DS

Dr. Sachin B L· 2023

Question 8Discuss concept and suggest pragmatic measuresGS3GS1

India is often criticized for its regulatory cholesterol, which hinders economic growth and innovation. Discuss the concept of 'regulatory cholesterol' and its impact on the Indian economy. Suggest pragmatic measures to streamline the regulatory environment and promote ease of doing business in India.

Open scan (p.21)

Introduction

'Regulatory Cholesterol', as acknowledged by various reports like Ease of doing business report of World Bank, Economic survey indicates the fact that businesses in India are bound by huge number of laws that actually hinders company operations.

37 words

Main Body

Data: There are as many as 1536 laws that directly or indirectly govern closing business in India.

Concept of Regulatory Cholesterol:

India since independence followed the economic trajectory of Mixed economy with Government led planned economic development restricting & controlling economic activity via regulation like license raj, inspector raj, etc.

Although LPG reforms of 1991 brought neo liberal paradigm shift, Indian economy is still burdened by outdated

E significant curtailment that hinders economic growth.

Impact of it on Indian economy:

1Duplication of MIMEs:

It pays to be under regulatory radar of government for MIMEs in India. Micro & small enterprises are instructed to go big with higher cost of compliance moderated

2Against 'Laissez Faire' principle of Modern market economy - Impedes upon autonomy of private sector
3Restrict Job Creation - because companies being apparatus of being reorganized sector with extra legal burden
4Hindu foreign investment in form of FDI, FPI, etc - with tier of regulation
5No incentive to adopt 'Economy of scale' model of growth
6can also lead to 'Middle income trap'

Measures to streamline & promote ease of doing business:

1Constitution of National Compliance Commission - objective of identifying duplication & redundancy among compliance requirement
2Creation of Unique identity for enterprise in form Unique Entrepris number of leading multiple identification issued by State & Centre
3Digitization - all compliance & filings must go digital
4Introduction of edX certification or third party certification - help augment government enforcement capacity & improve public convenience
5Formalization of Indian economy with government role as facilitator & enabler rather than controller & regulator

India's dream of becoming 'Viksit Bharat' (developed nation) by 2047 can be achieved by taking first step of checking of colonial legal laws.

294 words16 paragraphs

Conclusion

India's dream of becoming 'Viksit Bharat' (developed nation) by 2047 can be achieved by taking first step of checking of colonial legal laws.

23 words

  • Opens with acknowledgment from credible sources
  • Clear data point provided (1536 laws)
  • Historical context provided

Topper

Dr. Sachin B L

2023

Subject & Paper

GS3GS1

Topic

Economic Governance

Regulatory Environment

Regulatory cholesterol and ease of doing business

Writing Stats

354

Total words

16

Paragraphs