To Grow Rapidly, India Needs To Scrap Regulations Piled Up Over Years: NITI Aayog CEO
Adding a lot of rules and regulations year after year has made India extremely complex to do business
Adding a lot of rules and regulations year after year has made India extremely complex to do business in and there is a need to do away with all those rules to improve ease of doing business (EoDB) in the country, NITI Aayog CEO Amitabh Kant said on Friday.
“There is no substitute to growth. Growth provides the impetus to eliminating poverty and providing jobs. But one critical factor of growth is that countries have to become easy and simple,” he said while unveiling a report by policy think-tank Pahle India Foundation.
Speaking at the event, Kant said that in India, policymakers added a lot of rules and regulations year after year and made the country “extremely complex and complicated to do business”.
“My belief is that government at best can be a facilitator and wealth creation has to be done by the private sector. Therefore, we need to do away with all these rules and regulations which we have drawn over the years,” he said.
The NITI Aayog CEO added that it would be very difficult for the Indian economy to grow at high rates of eight to nine percent per annum on a sustained basis over a three decade period without making India easy and simple.
“It is important that India grows rapidly because we are passing through a window of demographic transition which rarely happens in history. Our average age is 29 and we need to lift a vast segment of our population above the poverty line. Post World War II, several countries have done that. Japan, Korea, Taiwan and China are some examples who have grown for almost two decades at high rates and that is why they were able to lift huge number of people above the poverty line,” he said.
He said the government had tried to do that in the last four years by scrapping close to 1,300 laws, digitising every sector of India’s economy and cutting away human intervention. “This is the reason India was able to jump up 65 positions in the World Bank EoDB index. Our target is to reach the top 50 in the next two years and in the top 25 in the next five years.”
Kant said that considering the large size of the country, much of the investments and decision making happens in the states and this it was important to make the states easy and simple.
Citing the case of sugar, alcohol beverages and tourism sectors, the study titled “An Integrated Value Chain Approach to Ease of Doing Business” makes a case for an integrated value chain approach to EoDB in order to achieve more quantifiable gains and better results for the states. It also said the three sectors together created employment for nearly 80 million people in India in 2018.
The report recommends overhauling of state Excise practices, including moving from offline systems to online, along with several other policy measures for improving Ease of Doing Business (EoDB) and GDPs of states.
The report also stresses the need for the current EoDB framework to incentivise states to comprehensively overhaul those state legislations, such as the Excise Act, that hamper ease of doing business, and therefore growth.
Kant saidsectoral approach recommended by the report as the next step in the EoDB evaluation framework was worth considering.