FREEING INDIAN ENTREPRENEURSHIP FROM REGULATIONS

India aspires to become a $5 trillion economy and a global manufacturing and innovation hub, yet its entrepreneurial base remains paradoxically thin:

• 6.3 crore enterprises, but

• Only ~30,000 companies with paid-up capital above ₹10 crore.

This is not a failure of talent or ambition — it is a failure of governance design.

The Core Argument: Entrepreneurship Is a Survival Game, Not a Planning Exercise

Entrepreneurship is fundamentally about staying alive long enough to get lucky.
Markets are uncertain, capital is scarce, skills are uneven, and failure is common.

What the Indian state historically added was regulatory risk — the most avoidable and damaging risk of all.

Three moments worsened this burden:

• 1956 – Industrial Policy Resolution

• 1967 – Expansion of controls

• 1976 – Height of Licence Raj

The 1991 reforms restored balance partially — but never fully dismantled the control mindset.

Licence Raj: A System Built on Distrust

The Licence Raj was premised on a belief that:

• Entrepreneurs are rent-seekers unless tightly controlled

• State permission must precede economic action

This resulted in:

• Prior approvals replacing post-facto accountability

• Compliance becoming an end in itself

• Entrepreneurship reduced to navigating files, not markets

The legacy persists even today — not in ideology, but in administrative habits.

Jan Vishwas Siddhant: A Shift from Control to Trust

The Jan Vishwas Siddhant proposes a fundamental reversal of regulatory logic:

“Everything is permitted unless explicitly prohibited.”

Its central promise:

• Replace prior approvals with self-registration

• Decriminalise minor, procedural, and technical violations

• Trust citizens first; penalise only proven harm

This is not deregulation — it is smart regulation.

Six Pathologies Crippling Indian Entrepreneurship

1. Prior Approval Raj

Entrepreneurs face:

• ~500 central approvals

• ~3,200 state-level approvals

Licences, NOCs, consents, renewals — even when no public harm exists.

2. Instrument Proliferation

Beyond Acts and Rules, businesses must comply with:

• Notifications, circulars, guidelines, SOPs, FAQs, office orders, press notes, schemes

Over 12,000 non-law instruments govern employers — many unnotified, yet penal.

This violates legal certainty, a core rule-of-law principle.

3. Compliance Blind Spot

Policymakers focus on what a law intends, not what it demands daily.

Result:

• Endless filings

• Duplicate reporting

• Microspecification of processes instead of outcome-based regulation

4. Enforcing the Unenforceable

Indian laws frequently criminalise aspirational goals.

This ignores a constitutional wisdom:

• Fundamental Rights → enforceable

• Directive Principles → aspirational

Criminalising what cannot be enforced breeds arbitrariness.

5. Process as Punishment

Jail provisions exist without prosecutions.

Result:

• Threat-based governance

• Inspector discretion

• Court congestion

The fear of punishment, not actual punishment, becomes the regulatory tool.

6. No Single Source of Truth

There is:

• No unified database of laws, rules, and subordinate instruments

• No mandatory gazette publication of all compliance demands

This violates transparency and natural justice.

What Jan Vishwas Changes Structurally

🔹 Perpetual Self-Registration

Licences removed except for:

• National security

• Public safety

• Human health

• Environment

🔹 Decriminalisation with Proportionality

• Civil penalties over imprisonment

• DPIIT principles applied across ministries

🔹 Outcome-Based Regulation

• Focus on harm, not paperwork

• Shift from micromanagement to accountability

Why This Matters for Jobs and Growth

Entrepreneurship is iterative hypothesis testing, not five-year planning.

When regulatory friction is high:

• Firms remain small

• Hiring is delayed

• Formalisation slows

Trust-based regulation can:

• Accelerate non-farm job creation

• Encourage scale-ups

• Improve India’s global competitiveness

A Democratic Transformation

The deepest promise of Jan Vishwas is political, not economic.

It transforms:

• Ruling → Governing

• Praja (subjects) → Nagrik (citizens)

Trust becomes the default, coercion the exception.

Conclusion

India does not lack entrepreneurs.
It lacks institutional faith in them.

Jan Vishwas Siddhant offers a chance to:

• Remove regulatory cholesterol

• Restore legal clarity

• Unleash mass prosperity

But success depends on full implementation, not partial adoption.

MAINS QUESTIONS  

Q1. “The shift from Licence Raj to Jan Vishwas reflects a deeper transformation in the philosophy of governance.” Analyse this statement in the context of India’s regulatory reforms.

Q2. Discuss the six regulatory pathologies that constrain entrepreneurship in India. How does the Jan Vishwas Siddhant seek to address them?