India's Reform Journey Revisited: Janhavi Nilekani, Aastrika Foundation

India's Reform Journey Revisited - Janhavi Nilekani, Aastrika Foundation

What is one reform that was overlooked in 1991?

One important reform which I feel is still pending and still needed is to decriminalize a lot of the existing acts. I'll give you an example from the air pollution world which is-- I worked in that space for a decade and most violations of pollution control regulations have criminal penalties. For example, most factories where the concentration of air pollution from their industrial tax is higher than the regulation, the penalties for that are actually criminal penalties that you can go to jail, the industry owner can go to jail or the person in charge can go to jail rather than being civil penalties, like paying a fine.

This actually has made regulation in that whole space very difficult because the regulator does understand that levying a criminal penalty if your pollution is slightly above the average and so forth, is too harsh a judgment. Therefore what happens is typically the regulator is not ever imposing these penalties. It's very rare for them to actually impose penalties because that penalty is so severe.

Having punishments through the system be proportionate to the act would really enable us to take a lot of reforms forward, in the case of air pollution, take it further. Market-based solutions like a cap and trade market and carbon taxes and so on, all of them need a backbone of civil penalties for pollution and not criminal penalties which are being treated like a law and order situation.

What is one reform that India needs today?

In 2023, I think, the most important reform needed today is to go further on not controlling quantities of supplies bought and sold. We've recently heard about an import restriction on laptops. Similarly, there are actually quite a few constraints. There are still a lot of elements of the license  raj pending. I run two small companies, and the compliance costs are huge. Ensuring that there truly is an ease of doing business, the compliance for all small organizations is not so expensive and so costly, as would enable and empower a whole host of small organizations to produce more and be more active participants of the economy.