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Regulatory Hurdles Pointed Out by EAC-PM Report

    2 September , 2022         Fdiindia

Regulatory Hurdles Pointed Out by EAC-PM Report

A recent industry report put the inadequate business regulations into focus, saying they are hindering India’s potential growth. The report said that India needs to consolidate and reform its current enterprise, business environment, and competition policy to allow more productive companies to rise and create a sustainable job atmosphere.

The report titled “The Competitiveness Roadmap for India@100”, which has been jointly published by the Economic Advisory Council to the Prime Minister (EAC-PM) and the Institute for Competitiveness, was released by Bibek Debroy, EAC-PM chairman.

As per the report, India’s headline GDP growth is experiencing robust growth. However, an increase in inequality, weak social progress, and a lack of confluence between various regions speculate that the GDP growth has failed to translate into the improvements in living standards for many citizens as was previously anticipated.

The report, which has been authored by Amit Kapoor, chairman of the Institute for Competitiveness, and Professors Christian Ketels and Michael E. Porter of Harvard Business School, stated that India has become a key player in the global supply chain and economy through significant foreign direct investment (FDI) inflows and international trade.

“India needs to strengthen effective market competition, a more central element of its efforts to upgrade business environment conditions,” said the report.

“India needs to launch a new set of sector- and location-specific growth initiatives to reframe some of its key industrial and regional policies. Sector- and location-specific initiatives can identify the specific needs of individual clusters and regions and then select from generic policy tools to pursue a coherent strategy for growth and competitiveness upgrading,” it added.

The report said that India’s productivity growth has seen an impressive rise over the years and has been proportionate to the GDP growth. However, labor mobilization has remained low, especially for women.

“(Labor mobilization) has been falling over time, especially since 2005 when job creation dramatically decreased... Large firms have driven productivity growth but not job creation, and the majority of employees are stuck in small, low productivity, and low growth firms,” the report further added.

The EAC-PM report also brought attention to the fact that India is doing well in terms of competitive areas that require sophistication in management, such as technology which is a high-skill industry.


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