India’s Regulatory Systems Will Add Incremental $1 Tn GDP
The last decade was the coming-of-age of the Indian polity and policy, moving from the ‘Garibi tragic-story’ to ‘global & growth trajectory’. With the delivery of basic civic needs as its pillar, to policy focus on AI, digital platformisation and data democratisation across industries, it underscores the government’s commitment to fostering innovation and driving economic growth with a global perspective. Today, India stands as a globally significant nation, be it in actively championing the cause of the Global South, advocating for the modernisation of international institutions, or demonstrating its capabilities through a successful presidency of the G20. Such confidence comes only with achieving domestic socio-economic security and sufficiency, as much as global political and trade influence.
In the last decade, India witnessed extensive infrastructure development, enhancing national progress. Upgraded road networks connected remote areas, improving transportation, while rail investments boosted efficiency and connectivity. Airport development surged, facilitating regional and global accessibility. India's top-tier telecom connectivity emerged, and the establishment of newer educational institutes, and introduction of the National Education Policy (NEP) emphasises academic excellence, and a multidisciplinary approach, especially with focus on skilling, to prepare students for 21st Century challenges. ‘Make in India for the World’ is pivotal to India's rise in global tech and commerce. The strategic use of data and digital tech has streamlined governance, giving citizens dignity and immediacy. Initiatives like Jal Jeevan Mission, Swachh Bharat Abhiyan, and Saubhagya have provided clean water, toilets, and electricity to underserved regions over the past decade. India's diligently constructed digital public infrastructure emerges as a powerful catalyst in the nation's pursuit of economic growth. Landmark initiatives such as Aadhaar, and Digital India, have streamlined access to public services, promoted financial inclusion, and elevated government-citizen interactions.
The government has fostered a distinctive sense of developmental urgency, consistently driving initiatives that propel the nation forward. This proactive approach has positively influenced the other pillars of democracy, fostering a culture of responsiveness and innovation. Acknowledging the need for efficiency and speedy judicial processes, the judiciary has started adoption of technology for its processes. This move towards digitisation will not only expedite court proceedings but also enhance accessibility. While there is a large amount of pendency in the judicial system, a process redesign that ignores the traditional rent-seekers would solve for the speed issue. While the integration of technology may take time to yield its full benefits, initiatives like Online Dispute Resolution (ODR) signal a commitment to a speedier and more accessible justice system.
The formidable political will and effective regulatory frameworks have been key drivers in propelling India's economic engine. A commendable aspect of this transformation lies in the government’s adoption of a global-scale-based approach, emphasising policies that not only supervise but also drive innovation with a global outlook. This shift is made possible by the Indian regulators who have played a pivotal role across various sectors, ensuring market stability and financial resilience while fostering innovation through a consultative and developmental approach.
From the RBI to SEBI and CCI, regulatory autonomy and competence have been consistently demonstrated, paving the way for a conducive environment for growth. By embracing advanced technologies, these regulatory bodies have propelled their sectoral participants into world-class digital delivery entities, and with scale. The integration of digital platforms has streamlined financial operations, improved regulatory oversight, and bolstered investor confidence. This forward-looking approach positions India's financial regulatory landscape as a beacon of efficiency in the global arena.
Regulatory independence within the ambit of enabling legislations in India serves as a compelling example of effectively balancing dual tasks – sectoral development and supervision. The regulatory bodies, empowered by legislation, operate autonomously to foster growth and innovation within their respective sectors. Simultaneously, they uphold a crucial supervisory role to ensure compliance, fairness, and stability. This equilibrium allows regulatory authorities to adapt swiftly to evolving industry dynamics, facilitating the creation of an environment conducive to sectoral development.
India’s pathbreaking legislations, such as GST, RERA and IBC, have reshaped industries, and introduced positive changes in the business landscape. With the introduction of RERA, it is estimated that two-thirds of realty developers in the country are new and first-generation entrepreneurs, with no past baggage or deigned mal-intent. However, the success of these reforms ultimately depends on the willingness of market constituents to embrace them with a forward-looking mindset. These regulatory developments would enable an incremental $1 trillion to the Indian GDP.
However, it's essential to acknowledge potential areas for improvement. There is a need for continued investment and innovation, especially in sustainable practices to address environmental concerns. Additionally, ensuring the inclusivity of economic growth is crucial, with a focus on narrowing socio-economic disparities. Strengthening cybersecurity measures is imperative, given the increasing reliance on digital platforms. Moreover, ongoing efforts to streamline bureaucratic processes and reduce red tape will further enhance the ease of doing business, attracting more investments.
Resilient and resounding national leadership is about navigating challenges that will keep emerging, and sustaining economic momentum. Not every outcome would be perfect or flawless. The government's commitment to fiscal discipline and inclusive development is poised to add to a resilient economic landscape. Moreover, political stability and consensus on key economic policies provide businesses with the confidence needed for long-term investments. In the year ahead, comprehensive reforms in land, agriculture, taxation, and administrative laws to enhance public service transparency and efficiency has the potential to inject an additional $1 trillion into India's GDP, fostering sustainable economic growth.
Srinath Sridharan - Policy Researcher & Corporate Advisor.
Twitter : @ssmumbai
&
Shailesh Haribhakti, Independent Director on corporate boards.
Twitter : @ShaileshHaribh2
