Complexities of the Modern Industrial Economy

The modern industrial economy is becoming increasingly complex, necessitating improved standards in safety, health, and the environment. This complexity does not inherently conflict with efforts to enhance the ease of doing business.

Challenges for MSMEs and Startups

• Large firms can manage the regulatory burden, but MSMEs and startups often struggle with it.
• State governments, along with municipal and district authorities, play a crucial role in managing regulatory frameworks.

Regulatory Reforms and Assessments

• All regulatory requirements should be listed and subjected to a professional regulatory impact assessment (RIA).
• Governments should form expert teams to review regulations sector by sector, in partnership with willing chief ministers.

Model Reforms

Several reform suggestions include:

• Do away with prior permissions for pollution control by adopting European standards and real-time measurements with financial penalties for breaches.
• External Certification: Replace government inspectors with third-party inspection and certification, subject to audit and penalties for breaches.
• Reduce Record-Keeping: Simplify reporting requirements to cut costs, transitioning towards digital governance.

Implementation Challenges

• Resistance to change exists within government agencies, requiring patient and transparent consultations with stakeholders.
• Building a grassroots constituency for reform could create momentum across departments and states.

Indicators of Success

• Success would be measured by feedback from small entrepreneurs and startups.
• A strong central leadership is crucial to support these initiatives, fostering sustainable reforms.