Striking the right balance between optimizing growth and regulatory framework crucial
Dr V Anantha Nageswaran, Chief Economic Advisor, Government of India highlighted the need for striking the right balance between optimizing growth and regulatory framework in light of global uncertainties. He was addressing the Plenary session on the Future of Regulation: Balancing Innovation and Risk at the Global Economic Policy Forum 2024 organized by the Department of Economic Affairs, Ministry of Finance, Government of India, and the Confederation of Indian Industry (CII) today.
Dr Nageswaran discussed how financial systems require a strict regulatory approach due to their systemic impact. Some sectors can self-regulate, but the interconnected nature of financial markets necessitates more vigilant oversight to safeguard economic stability.
Shri Debasish Panda, Chairman Insurance Regulatory and Development Authority of India (IRDAI), while addressing the gathering virtually laid the overall foundation of insurance which rests on making insurance simple, available, accessible, and most importantly, affordable. He concluded the session by addressing that Regulations are designed to balance innovation and risk, ensuring the business ecosystem grows responsibly without compromising stability.
Smt Ravneet Kaur, Chairperson, Competition Commission of India expressed how the Competition Commission works under the Competition Act. She explained the framework is set: first, identify the relevant market, then look at market shares, concentration levels, and competitive constraints. She highlighted that the Commission is mindful of India’s growing startup ecosystem and tailors its regulations, accordingly, ensuring fair competition while fostering innovation. Timely decision-making, especially regarding mergers and acquisitions, is crucial for sustaining growth, and the Commission provides clear guidance for parties involved.
Shri K Rajaraman, Chairperson International Financial Services Centres Authority (IFSCA) highlighted how regulation should guide and provide overall structure while allowing room for growth. This balance is essential for fostering innovation over the next 25 years as part of Amrit Kaal. He emphasized the importance of balancing regulation with innovation, particularly in a globalized and interconnected economy. He highlighted the necessity for dynamic and adaptive regulatory frameworks, which avoid stifling growth while ensuring risk mitigation.
Mr Janmejaya Sinha, Chairman of BCG India, delivered the welcome and opening remarks. In his welcome remarks he outlined seven key points for discussion: the philosophy of regulation, the customization of regulations, the balance between risk and innovation, the efficiency of contract enforcement, ensuring a level playing field, the evolving role of regulators, and the challenges posed by the global economy. He emphasized the need for a thorough discussion on the cost and benefits of regulation, stressing that finding the right balance is crucial.
11 December 2024
New Delhi