New Delhi: Highlighting the need for enhanced deregulation for micro, small and medium enterprises (MSMEs), the Economic Survey 2024-25 on Friday said some challenges remain in the regulatory environment.
The regulatory compliance burden holds back formalisation and labour productivity, limits employment growth, chokes innovation and depresses growth, according to the survey tabled in Parliament by Finance Minister Nirmala Sitharaman.
“The faster economic growth that India needs is only possible if the union and state governments continue to implement reforms that allow small and medium enterprises to operate efficiently and compete cost-effectively,” it stated.
Without deregulation, other policy initiatives will not deliver on their desired goals, emphasised the economic survey, adding that by empowering small businesses, enhancing economic freedom, and ensuring a level playing field, governments can help create an environment where growth and innovation are not only possible but inevitable.
It further stressed that Ease of Doing Business (EoDB) 2.0 should be a state govt-led initiative focusing on fixing the root causes behind the unease of doing business. In the next phase for EoDB, it added, states must break new ground on liberalising standards and controls, setting legal safeguards for enforcement, reducing tariffs and fees, and applying risk-based regulation.
Citing examples from other countries, the survey stated, “The need to find growth avenues in an export-challenged, environment-challenged, energy-challenged, and emissions-challenged world means we need to act on deregulation with a greater sense of urgency.”