India's Economic Growth and Regulatory Challenges

India's economic growth is distinct among emerging economies, primarily driven by the services sector rather than manufacturing. Since 1980, the share of services in India's gross value added has escalated from 33% to 55%, while manufacturing has seen a marginal increase from 16% to 17.5%.

Impact of Regulation on Manufacturing and Services

• Manufacturing has faced extensive economic regulation, as factories are traditionally seen as the industry's archetype.
• Services have historically encountered less regulatory scrutiny but are now increasingly in the regulatory spotlight as the sector grows.

Challenges in Doing Business in India

• Regulatory hurdles include unnecessary inspections and requirements, such as outdated provisions for factories.
• Instances of corruption, like demands for bribes from inspectors, complicate business operations.

Deregulation as a Policy Priority

• Strategies for reducing "regulatory cholesterol" include: 
  1. Substituting inspections and NOCs with self-certification for low-risk activities.
  2. Utilizing certified third parties for approvals, expediting processes.
  3. Reforming land and labor markets to ease regulations on land acquisition and labor laws.

Leveraging Technology and Reforming Labor Laws

• Introduce technology for automated approvals and NOCs, especially for buildings and other areas.
• Review and amend labor laws to accommodate gig workers, maintaining sufficient flexibility while protecting rights.

Transformative Regulatory Approach

• India needs to balance regulation with business facilitation to harness economic growth.
• Regulators must transition from a distrustful to a trustful attitude towards businesses.

Vision for Economic Growth

• India aims to sustain an annual economic growth rate of at least 8% to achieve developed nation status by 2047.
• Removing micro-economic regulatory barriers is crucial for energizing the domestic economy against global challenges.