Deregulation in focus, the bet is on entrepreneurs

Three committees have been set up to advance deregulation, including two focused on deregulation (one chaired by Rajiv Gauba and another under the Cabinet Secretary) and a third under Rajiv Gauba developing reform ideas for Viksit Bharat. The effort has consulted more than 500 stakeholders across sectors, engaged all relevant ministries and regulatory bodies, and received over 1,000 recommendations. Progress includes: questioning the necessity and cost of licenses, approvals, and registrations; for MSMEs, raising the investment threshold to ₹100 crore, exempting CSR requirements, reducing compliance obligations, and granting perpetual validity for consent to operate. For higher-end regulation, Jan Vishwas Act 2.0 now covers 717 provisions and decriminalises 1,018 offences; FSSAI changes include higher registration thresholds, automatic registrations, and perpetual licenses via annual payments; drugs licensing was simplified to notification to CDSCO with parallel lab testing and trials; the Companies Act reduces startup compliance burdens and eases mergers; director KYC is simplified; and removal of certain quality control orders for key raw materials. Tariffs on raw materials and intermediates have been reduced to lower costs. The objective is to prepare India for FTAs with the UK, Australia, UAE, and the EU, fostering a trust-based regulatory environment and a level playing field for Indian entrepreneurs.

One of the most important ideas in Prime Minister Narendra Modi’s Independence Day speech last August was the call for a new wave of reform built around deregulation, signaling a shift toward reducing regulatory friction for enterprise.

That began to change after 2014 with a massive infrastructure buildout. India added more roads than existed in Germany, doubled the number of airports, quintupled port capacity, built 30 million houses, increased rail capacity, and brought infrastructure to a level from which it could genuinely compete.

The 1991 reforms removed many of the worst distortions, reduced tariffs, and freed prices, but did not create a strong export orientation.

Between 1960 and 1991, Indian enterprise was constrained by pervasive controls such that production levels, product lines, and capacity expansion required government approval.

At independence, India adopted universal franchise and began industrialisation by placing the State in control of the commanding heights of the economy, a regime that gradually evolved into the Licence Raj.