The Hard Art of Entrepreneurship in India

The evolution of entrepreneurship in India has been significantly influenced by state regulations over the years. Historical interventions in 1956, 1967, and 1976 made entrepreneurship challenging, but the liberalization in 1991 attempted to restore a balance between trust and regulation.

Pathologies of Regulatory Cholesterol

• Prior Approval: Entrepreneurs face substantial challenges with numerous prior approvals required from central and state ministries, impeding innovation and business activities.
• Instrument Proliferation: The creation of multiple non-law, non-rule instruments complicates compliance landscapes, surpassing 12,000 instruments for employers.
• Compliance Blind Spot: Policymakers often overlook the cumulative compliance obligations, focusing more on targeting processes than outcomes.
• Enforcing the Unenforceable: Aspirational legislation often results in corruption due to the gap between law enforcement and practical implementation.
• Process as Punishment: The criminalization of certain business activities, like cheque bouncing, leads to clogged courts and unjust outcomes.
• No Single Source of Truth: Lack of a comprehensive, live database for compliance requirements results in corruption and inefficiencies.

Jan Vishwas Siddhant: A Transformational Proposal

The Jan Vishwas Siddhant aims to address these pathologies by:

• Converting licenses to perpetual self-registration outside critical areas.
• Permitting everything unless explicitly prohibited.
• Implementing risk-based, random inspections, primarily by third-party entities.
• Digitizing filings and restricting penal provisions to laws and rules.
• Establishing IndiaCode as a live, comprehensive database integrating with e-gazette for transparency.
• Conducting annual regulatory impact assessments for better compliance management.

Impact on Entrepreneurship

The proposal seeks to shift from ruling to governing, fostering a culture where entrepreneurship is seen as iterative and experimental. This transition is crucial for accelerating non-farm job creation and overcoming existing economic challenges, thereby transforming entrepreneurs from seeking permission (ijaazat) to focusing on effort (koshish).