Administrative hassle is a major deterrent against setting up and expanding businesses and industry. Some believe the administrative authorities should have a tight control over business organisations and monitor every aspect of their operations; and that prior regulatory approvals must be obtained for all major business decisions. This may well be true for a particular time and economy but it is certainly not the ideal model for a country under colossal debt and where a host of factors adversely affect businesses.

Investment cannot be encouraged and business cannot be promoted by requiring licenses, permits and no-objection certificates (NOCs) at each commercial step. This approach is ad hoc and discretionary; and it causes tentativeness and uncertainty. It leads to red tape and procedural hassle which only add the cost of business. Higher the administrative hassle, greater is the cost of business. Many a businesses shy away because of the hassle in obtaining administrative consents.

To truly preserve and promote business and investment, the governing frameworks must provide clarity, certainty and conduciveness. A quintessential measure is to stop direct and indirect governmental interference into private business and investment by removing unnecessary administrative and regulatory consents. This requires a holistic regulatory reform which guillotines all NOCs, permits and licenses, and replaces them with prescriptive regulations based upon best industry practices and standards.

The regulatory frameworks must give away prior administrative approvals and adopt compliance based system where businesses and promoters comply with prescribed conditions and standards, and make disclosure of compliance to the authorities. Enforcement is applied, if the required disclosure was not made or it indicated violations.

Times have tremendously changed; and the present calls for a meaningful reform of our frameworks!