{"id":37996,"date":"2025-02-25T18:57:17","date_gmt":"2025-02-25T13:27:17","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=37996"},"modified":"2025-03-24T12:43:59","modified_gmt":"2025-03-24T07:13:59","slug":"deregulation-commission-and-state-role-in-governance","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/25-02-2025\/deregulation-commission-and-state-role-in-governance","title":{"rendered":"Deregulation Commission &amp; State&#8217;s Role in Governance"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/Governance<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In a significant move aimed at <strong>promoting ease of doing business and reducing bureaucratic red tape<\/strong>, the Prime Minister of India announced the establishment of a <strong>Deregulation Commission.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Understanding Deregulation and Its Need in India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Deregulation refers to the process of r<strong>educing or eliminating government-imposed restrictions<\/strong> on industries to promote free-market competition and efficiency.<\/li>\n\n\n\n<li>In India, bureaucratic red tape, excessive licensing requirements, and sectoral restrictions have often deterred businesses, particularly startups and MSMEs, from reaching their full potential.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Highlights of the Announcement<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Prime Minister Modi highlighted the government&#8217;s efforts <strong>to eliminate hundreds of archaic compliances<\/strong> through the <strong>Jan Vishwas 2.0 initiative, <\/strong>and emphasized the <strong>need for less government interference<\/strong> in society.\n<ul class=\"wp-block-list\">\n<li>Focus areas include<strong> banking, energy, telecom, retail, and manufacturing.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>The Deregulation Commission aims to identify and eliminate unnecessary government regulations.\n<ul class=\"wp-block-list\">\n<li>It aims to work alongside existing regulatory bodies such as RBI, SEBI, TRAI, and CERC, along with accelerating private investment, reducing red tape, and enhancing economic competitiveness.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Reasons for Establishing a Deregulation Commission<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Reducing Bureaucratic Red Tape:<\/strong> India ranks <strong>63rd in the Ease of Doing Business Index (2020) by the World Bank.<\/strong>\n<ul class=\"wp-block-list\">\n<li>A Deregulation Commission would focus on reducing excessive paperwork, streamlining approval processes, and eliminating redundant laws.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Enhancing Economic Growth:<\/strong> Sectors such as manufacturing, infrastructure, and digital economy require faster clearances and simplified compliance mechanisms.<\/li>\n\n\n\n<li><strong>Encouraging Entrepreneurship and Innovation:<\/strong> <strong>Startups and MSMEs <\/strong>often struggle with regulatory bottlenecks, including multiple <em>approvals, high tax burdens, and stringent labor laws.<\/em><\/li>\n\n\n\n<li><strong>Revisiting Outdated Laws:<\/strong> Several colonial-era laws still exist in India&#8217;s legal framework. A Deregulation Commission could recommend amendments or repeals of such archaic laws to align with modern governance needs.<\/li>\n\n\n\n<li><strong>Boosting FDI:<\/strong> India has witnessed increasing FDI inflows, but <strong>restrictive policies in sectors like retail, insurance, and e-commerce <\/strong>still pose challenges.<\/li>\n\n\n\n<li><strong>Strengthening Federalism and State Autonomy:<\/strong> Regulations vary across states, leading to inconsistencies in business environments.\n<ul class=\"wp-block-list\">\n<li>A central body could work with state governments to create uniform policies, ensuring a level playing field for businesses across India.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Increased Competition &amp; Efficiency:<\/strong> Lower prices and better services for consumers.\n<ul class=\"wp-block-list\">\n<li>Private sector participation has enhanced productivity.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Evolution of Deregulation in India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India&#8217;s economic liberalization<\/strong> initiated reforms <strong>to reduce state control<\/strong> over industries, <strong>encourage foreign direct investment (FDI)<\/strong>, and promote <strong>private sector participation.<\/strong><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\" colspan=\"4\"><strong>Regulatory Commissions Overseeing Deregulation<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Regulatory Commission<\/strong><\/td><td><strong>Sector<\/strong><\/td><td><strong>Role<\/strong><\/td><td><strong>Past Regulations<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">RBI<\/td><td>Banking &amp; Finance<\/td><td>Monitors financial institutions and monetary policy.<\/td><td>&#8211; Reduced its stake in public sector banks;<br>&#8211; Increased FDI limits in the insurance sector;<br>&#8211; Deregulation of interest rates;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">TRAI<\/td><td>Telecommunications<\/td><td>Ensures fair competition and consumer protection.<\/td><td>&#8211; <strong>1994:<\/strong> National Telecom Policy allowed private players.<br>&#8211; <strong>1999: <\/strong>Revenue-sharing model replaced license fees.<br>&#8211; <strong>2016:<\/strong> Entry of Reliance Jio led to a price war, benefiting consumers.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">CERC<\/td><td>Energy<\/td><td>Oversees electricity tariffs and open access.<\/td><td>&#8211; Increased private investment in power generation.<br>&#8211; Open access to electricity transmission, allowing consumers to choose their suppliers.<br>&#8211; Renewable energy promotion with solar and wind power auctions.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">PNGRB<\/td><td>Oil &amp; Gas<\/td><td>Ensures transparency in petroleum pricing.<\/td><td>&#8211; <strong>2010:<\/strong> Deregulation of petrol prices.<br>&#8211; <strong>2014: <\/strong>Diesel price deregulated.<br>&#8211; <strong>2016:<\/strong> Introduction of daily fuel price revision.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Negative Impact of Deregulation<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Market Failures:<\/strong> Unchecked deregulation can lead to monopolies and economic crises (e.g., the 2008 financial crisis).<\/li>\n\n\n\n<li><strong>Job Losses in PSUs:<\/strong> Privatization led to layoffs in public sector enterprises.<\/li>\n\n\n\n<li>Regulatory Capture: Private entities may influence policies in their favor, harming consumer interests.\n<ul class=\"wp-block-list\">\n<li>Some industries saw the rise of dominant players (e.g., Jio in telecom).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Rural Disparities:<\/strong> Wealth concentration in the hands of a few can widen social inequalities. Benefits of deregulation are unevenly distributed, with rural areas lagging.<\/li>\n\n\n\n<li><strong>Environmental Concerns:<\/strong> Rapid industrial growth has increased pollution and resource depletion.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Forward<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Ensuring Consumer Protection:<\/strong> Regulations that protect consumer rights and fair competition must not be diluted.<\/li>\n\n\n\n<li><strong>Preventing Corporate Malpractices:<\/strong> Oversight is necessary to prevent monopolies and unethical practices.<\/li>\n\n\n\n<li><strong>Balancing Public Welfare and Business Interests:<\/strong> Sectors like healthcare and education require careful deregulation to avoid profiteering.<\/li>\n<\/ul>\n\n\n\n<p><a href=\"https:\/\/www.thehindu.com\/news\/national\/govt-to-set-up-deregulation-commission-to-further-reduce-states-role-in-governance-pm-modi\/article69225413.ece\" rel=\"nofollow noopener\" target=\"_blank\">Source: TH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Deregulation Commission &#038; State&#8217;s Role in Governance<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-37996","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/37996","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=37996"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/37996\/revisions"}],"predecessor-version":[{"id":38050,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/37996\/revisions\/38050"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=37996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=37996"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=37996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}