Reduce regulatory risk for growth

In his Independence Day address, the prime minister called for a change in the prevailing mindset of doubting wealth creators. This found further articulation in the finance minister’s Budget speech as well as in the Economic Survey. The recognition of this problem is a welcome development. Regulatory overreach and higher risk perceptions are a major concern, constraining business growth that need to be addressed.

A complex and unpredictable tax administration is a substantive burden. One transformative decision would be to give up the practice of fixing tax collection targets. These are increased linearly. In the real world, profits never grow linearly.