CEA V. Anantha Nageswaran addressing media after tabling of the Economic Survey 2024-25 in Parliament on Friday.
Credit: PTI Photo
Bengaluru: India will need to improve its global competitiveness through grassroot-level structural reforms and deregulation to reinforce its medium-term growth potential, the 2024-25 Economic Survey stated on Friday.
The survey strongly pitched for less state control and easier rules, stating that lowering the cost of business through deregulation will make a significant contribution to accelerating economic growth and employment amidst unprecedented global challenges.
“‘Getting out of the way’ is not easy for societies that are still structured around communities, groups, and kinship… But ‘get out of the way’ and trust people, we must, for we have no other choice. ‘Business as usual’ carries a high risk of economic growth stagnation, if not economic stagnation,” the survey, drafted by Chief Economic Advisor V Anantha Nageswaran and his team, stated.
“His (CEA’s) advice to the government to “Get out of the way” is the most sensible piece of advice that I have heard from any government official in the last 10 years,” said former Finance Minister P Chidambaram, reacting to the survey in a post on X.
The survey stated that underpinning specific policy efforts will have to be the philosophical approach to governance and that “Getting out of the way” and allowing businesses to focus on their core mission is a significant contribution that governments around the country can make to foster innovation and enhance competitiveness.
FM Nirmala Sitharaman presents the Economic Survey 2024-25 in the Lok Sabha on Friday.
Credit: PTI Photo
“The most effective policies governments - Union and States - in the country can embrace is to give entrepreneurs and households back their time and mental bandwidth. That means rolling back regulation significantly. That means vowing and acting to stop micromanaging economic activity and embracing risk-based regulations. That means changing the operating principle of regulations from ‘guilty until proven innocent’ to ‘innocent until proven guilty’,” it said.
Adding layers of operational conditions to policies to prevent abuse makes them incomprehensible and regulations needlessly complicated, taking them further from their original purposes and intents, it said.
“Wiping out the trust deficit in the country is imperative and government agencies have to set the agenda in this regard. Then, it is a good bet that the Indian public will overcome the challenges and turn them into opportunities on the way to Viksit Bharat by 2047,” the survey said.
The survey said that deregulation was more crucial to boost micro, small and medium enterprises (MSMEs) than large enterprises. Compliance costs in terms of time and financial resources are non-trivial for MSMEs while larger companies usually find a way around compliance.
It said that the next round of ease of doing business initiatives should be led by states rather than the Centre, in order to attract more investment.
Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.