May 28, 2020


Prime Minister Narendra Modi has recently given a call for self-reliance. Achieving this would not be possible without a comprehensive overhaul of our economic regulatory framework.

Pradeep S. Mehta, Secretary General, CUTS International, noted that we have hitherto failed to create right incentives for businesses of all sizes to practice inclusive and sustainable business models. The regulation making process is captured by only a few. Micro and small businesses, workers, farmers and citizens are disproportionately burdened.

He was speaking at the launch of A New Charter for the Nation’s Economic Regulatory Framework. The Charter has been endorsed by over 50 public intellectuals, scholars, businessmen and experts, including Vijay Kelkar, Chairman, NIPFP; Arun Maira, former Member of Planning Commission; Ajay Shankar, former Secretary to GOI; former Cabinet Secretary: K. M. Chandrasekhar; Arvind Mayaram, Deputy Chairman, Rajasthan CM’s Economic Transformation Advisory Council; Sidharth Birla, Chairman, Xpro India Limited; Gaurav Dalmia of Dalmia Group Holdings; Rathin Roy, former Member, PM Economic Advisory Council; Anu Aga, former MP, Rajya Sabha; former Foreign Secretaries: Shiv Shankar Menon and Shyam Saran among others.

It lays down a practical guideline to implement a whole of government systems approach for examining and reforming economic regulations. This includes listening to all stakeholders on whether the objective of citizen well-being is being pursed, soliciting views from the public on challenges faced, and conducting a cost-benefit analysis to design better alternatives.

The three-step test of legality, necessity, and proportionality, informed by consultation with stakeholders, particularly, micro and small businesses, workers, farmers and citizens, will ensure adoption and implementation of optimal regulations. An automatic review of regulatory requirements after a specified period has also been envisaged in the Charter (attached).

It also makes recommendations to ensure that regulatory bodies can overcome capacity and resource constraints, encourages them to act independently, and implement a robust grievance redress mechanism.

“The Charter is addressed as an Appeal to the Prime Minister and Chief Ministers of All States and Union Territories of India, as we believe the central and state governments will need to work together, along with other stakeholders, to reduce the mistrust between citizens, workers, farmers, businesses, and government, and usher a new era of economic democracy,” noted Mehta.

For more information, please contact:
Pradeep S Mehta: psm@cuts.org
Vijay Singh: vs@cuts.org