Economic Survey Makes Calls For Simplification Of Regulations And Transparent Supervision

The Economic Survey 2020-21 has called for the simplification of regulatory processes in the light of uncertainties amid the coronavirus pandemic.

The survey presented in Parliament by Union Finance Minister Nirmala Sitharaman on Friday noted that administrative processes in India are often loaded with significant procedural delays and other regulatory complexities in decision-making process to make them inefficient and cumbersome for all stakeholders.

In order to resolve the issues, authorities often make attempts to reduce the discretion by having more complex regulations, which is counterproductive and results in even more non-transparent discretion, it added.

According to the document prepared by the government's Chief Economic Adviser Krishnamurthy V Subramanian, international comparisons show that the problems of India's administrative processes derive less from lack of compliance to process or regulatory standards, but from over-regulation.

The survey observes that it is not possible to have regulations that can account for all the uncertainties in the world and all possible outcomes. The evidence shows that India over-regulates the economy.

"This results in regulations being ineffective even with relatively good compliance with the process," it said.

The solution, the Economic Survey says, is to avoid substituting supervision with more complex regulation. The optimal solution is to have simple regulations combined with transparent decision-making process.

It is important then to balance it with three things -- improved transparency, stronger systems of ex-ante accountability (such as bank boards), and ex-post resolution mechanisms.

The survey noted that wherever such regulatory processes have been simplified, ease of doing business has improved significantly.

With IANS Inputs