Thursday, September 19, 2013

Committee Report on Reforming Regulatory Environment in India

Last year, the Government had appointed a committee under the chairmanship of Mr. Damodaran, former Chairman of SEBI, to recommend reforms to enhance the regulatory environment for doing business in India. This was in response to the annual Doing Business rankings put out by the World Bank, where India has not been performing satisfactorily with little improvement or the last few years.

The committee has now issued its report, which is useful as it identifies the various shortcomings from the perspective of foreign investors doing business in India. It also makes several recommendations regarding legal reforms as well as on the regulatory architecture. While the reforms suggested are overdue, it is not clear as to how they can be implemented given that they relate to different government departments, and on certain issues even at the state levels, and it would be a mammoth task to implement them even if they are accepted formally by the Government. Nevertheless, the recommendations provide a useful starting point even if some of the government bodies were to begin implementing the recommendations that will send strong signal positive signal for others to follow.

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