Regulating the regulators to spur growth

Plan to remove bottlenecks with deregulation and bring about oversight for regulators can help fuel the next wave of start-up innovation and growth

- SHWETA RAJPAL KOHLI

DEREGULATION IS FAST emerging as the policy theme of the year. Over the past few weeks, Prime Minister Narendra Modi, Reserve Bank of India (RBI) Governor Sanjay Malhotra, and Chief Economic Advisor V Anantha Nageswaran have all indicated that the government and regulatory machinery are keen to remove bottlenecks in compliance and regulatory decision-making, making it a significant reform plank for India in 2025.

Perhaps the most welcome news has been the announcement by the PM to set up a Deregulation Commission aimed at minimising bureaucratic hurdles and alleviating the compliance burden across sectors, once again bringing the "ease of doing business" in India back in focus.

One of the most impactful areas for deregulation could be fintech, particularly financial regulators. India's financial market necessitates careful oversight, balancing growth, and stability through judicious regulation. There is immense respect for India's financial regulators as their efforts to strike this balance have allowed our economic system to be robust, stable, safe, and healthy.

Nothing can diminish that overarching goal. At the same time, the balance between promoting innovation and ensuring regulation is critical. Malhotra has emphasised the need to refine the regulatory framework to foster innovation while safeguarding consumers.

Strategic deregulation in the financial sector can catalyse growth, innovation, and competitiveness, fostering a business-friendly environment and attracting investments. This involves carefully assessing each regulation to ensure it strikes the right balance: promoting innovation and protecting consumers without stifling growth. Independent evaluations are invaluable to ensure objectivity.