To achieve $5 trillion GDP goal, India needs to revamp its regulatory frameworks | OPINION

By Dr. Jaijit Bhattacharya

This article is in continuation to last week’s article in this column “It’s time to regulate regulations in India to boost startups.” I have been inundated by examples of regulations that were either changed or are needed to be changed to unlock very significant economic value. In fact, regulatory frameworks appear to be an independent source of generating value in the economy.

Let us take the example of bike-taxis. This is a concept that is already prevalent in many South-East Asian countries. In India, where we have overloaded three-wheelers of all sizes carrying commuters who would like to commute at the cheapest cost possible, it is but obvious that a bike-taxi would be of immense demand for commuters.

While there is no central legislation regulating bike-taxis, the central government has recommended that bike-taxis be allowed for commercial use and had also directed the state governments to consider allowing private bikes to be converted into taxis so as to be used for commercial purposes and the regulations around the same.

The matter of whether or not bike-taxis are permissible, now lies in the hands of individual state governments.

Let us look at the curious case of digital maps. Up until this year, digital maps in India were illegal. Indian laws required Indian firms to seek licenses and additional approvals to create and publish topographical data.

In fact, no less than the prime minister of country noted that the “deregulation” step would help the country become more self-reliant and reach its $5 trillion GDP goal.

We also have unicorn startups running online gaming industries where the founders wake up every morning to check if they have been banned yet. State governments after state governments have been flirting with total bans and partial bans on online gaming.

Even though the government understands that one cannot stop the march of technology, we still have a situation that entire industries and the millions of people working in it, are perpetually on tenterhooks if their industry will continue to operate the next day.

We also had the case of industries being declared out-of-bounds for the private sector, because public sector enterprises were operating in those sectors. Hence, startups providing bus services were illegal as they competed with the state’s bus services. Or, providing food on train was illegal as it competed with Indian Railway Catering and Tourism Corporation (IRCTC).

Even voice over IP (what many of us commonly use on a daily basis over messaging apps such as WhatsApp and Telegram) was illegal in India as it competed with VSNL (a telecom company that was then under the government) and BSNL.

In fact, even delivering medicines to consumers was illegal, and so is delivering alcohol to consumers, thus inhibiting aggregator startups that were into online pharmacies and inhibiting aggregators that could enable alcohol delivery (which is a major source of revenues for most state governments).

The law mandated that all sarais (hotels and inns) would need to mandatorily keep an earthen pot of water outside for all visitors and passersby and provide a place to tie the horses. That law carried on till the 21st century till the government finally woke up and abrogated the law.

We need to make such changes much more rapidly. Perhaps looking at the Better Regulation Office of the UK government as an example of an institutional structure that is dedicated to overhaul older laws and enable increased efficiency in the economy would be a good starting point.

This article first appeared in India Today,

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