9:32 PM
Economic Survey for simplification of regulations
The Economic Survey on Friday called for simplification of regulatory processes in the light of uncertainties in the real world scenarios.
The Survey noted that administrative processes in India are often loaded with significant amount of procedural delays and other regulatory complexities in decision-making process, making them inefficient and cumbersome for all stakeholders.
It has highlighted this problem and recommended ways and means to resolve this administrative challenge.
The Economic Survey 2020-21 presented in Parliament on Friday said that in order to solve the problems, authorities often make attempts to reduce discretion by having evermore complex regulations, which is counterproductive and results in even more non-transparent discretion.
International comparisons show that the problems of India's administrative processes derive less from lack of compliance with process or regulatory standards, but more from over-regulation, it said.
It is not possible to have regulations that can account for all the uncertainties in the world and all possible outcomes, it said, adding, the evidence shows that India over-regulates the economy. This results in regulations being ineffective even with relatively good compliance with process.
Using the framework of 'incomplete contracts', the Survey argued that the problem of overregulation and opacity in Indian administrative processes flows from the emphasis on having complete regulations that account for every possible outcome.
This is due to the inadequate appreciation of the difference between ‘Regulation' and ‘Supervision', on the one hand, and the inevitability of incomplete regulations, on the other hand, it said.