MUMBAI: Warning that business as usual approach to policy reforms will push the economy which is already facing hiccups, to growth stagnation, the economic survey said by reducing the excessive regulatory burdens, governments can help businesses become more efficient, reduce costs, and unlock new growth opportunities. In short, the governments should help the industry rediscover their animal spirits.
“Regulations increase the cost of all operational decisions of firms, the survey said outlining a three-step process for the states to systematically review their regulations for their cost-effectiveness. These steps include identifying areas for deregulation, thoughtfully comparing the regulations with other states and countries and estimating the cost of each of these regulations on individual enterprises.
The survey also highlights that the next generation ease of doing business should be a state-led initiative focused on fixing the root causes behind the unease of doing business. And in the next phase, states must break new ground on liberalizing standards and controls, setting legal safeguards for enforcement, reducing tariffs and fees, and applying risk-based regulation.
While stating that looking ahead, economic prospects for FY26 are balanced, there are headwinds such as elevated geopolitical and trade uncertainties and possible commodity price shocks while “domestically we will have to overall improve our global competitiveness through grassroots-level structural reforms and deregulation to reinforce its medium-term growth potential.”
