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Informist, Friday, Jan. 31, 2025

--EconSurvey: Need to improve India's global competitiveness by deregulation 

--EconSurvey: Need deregulation, R&D, skilling for more industrialisation 

NEW DELHI – India will need to improve its global competitiveness through grassroot-level structural reforms and deregulation to reinforce its medium term growth potential, the Economic Survey for 2024-25 (Apr-Mar), tabled by Finance Minister Nirmala Sitharaman in Parliament on Friday, showed. 

To achieve its economic goals of becoming a 'Viksit Bharat' by 2047, India must reach a growth rate of approximately 8%, at stable prices, on average, for roughly 10-20 years, the survey said. While the appeal of this growth rate is undeniable; it is crucial to acknowledge that the worldwide environment--political and economic factors--will shape India's growth results. 

"Unburdened by licensing, inspection and compliance requirements, the people and small enterprises of India, with their high aspirations and intrinsic inventiveness, will find answers to the pressing challenges of growth, employment and development. Accelerating and amplifying the deregulation agenda already underway in the last ten years is the need of the hour," the survey document showed.

Instead of relying on regulators, it is time to rely on the internal engines and domestic levers of growth, focusing on a central element--the economic freedom of individuals and organisations to pursue legitimate economic activity, the document said.

Given the transition in the global economy to a place where traditional policy levers may not be relevant and the focus of policymaking has shifted inwards, it is imperative that expectations of the external sector's contribution to our economic growth must be realistic. 

Deregulation is far more critical for the growth of micro-small and medium enterprises than large enterprises because the cost of compliance in terms of time and financial resources are non-trivial for these small companies. "Given their economic capacity, Indian firms cannot adhere to applicable regulations without jeopardising growth opportunities and hurting investments and job creation," the survey said. 

Indian regulations force employers to redirect resources away from potential growth and employment opportunities to meet compliance requirements. In conclusion, the rapid economic expansion that India requires can only be achieved if the Centre and state governments persist in enacting reforms that enable small and medium businesses to function effectively and compete economically. 

The survey said that in addition to the Centre's efforts, states should engage in systematic deregulation as a key policy objective to enhance the economic freedom of production factors. "Small acts of deregulation may set off big waves of entrepreneurship, investment, innovation and growth," the survey said.  End

Reported by Kabir Sharma

Edited by Akul Nishant Akhoury

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