NITI Aayog Calls for Regulatory Reforms and Increased R&D Investment to Boost Economic Growth

Livemint - Economy · 13 May 2026 · 2 min read
Prelims · Economy Mains · GS3 Economy High relevance

NITI Aayog member Rajiv Gauba emphasized the need for granular regulatory reforms to reduce business friction and urged Indian industry to increase R&D investment to shift from technology import to creation, crucial for sustaining India's high economic growth.

Key points

Regulatory Cholesterol: Gauba highlighted the persistence of indirect licensing despite 1991 reforms, citing requirements like food safety licenses and environmental clearances as modern equivalents of license raj.

Jan Vishwas: The government aims to transition from a colonial mindset of distrust to trust-based governance, reducing punitive measures for minor violations.

Deregulation Progress: Since 2014, 42,000 compliances were eliminated and 3,700 provisions decriminalized, but Gauba stressed the need for comprehensive completion of this deregulation exercise.

First Principles for Regulation: Proposed limiting licensing to areas involving national security, human health, or environmental risks, streamlining other business processes.

[GS3-Economy] R&D Investment: India's gross R&D expenditure remains below global averages, with Gauba urging industry to treat R&D as a strategic imperative rather than a cost.

Quality Control Orders (QCOs): Positioned as economic upgrades rather than protectionism, QCOs aim to enhance manufacturing quality and consumer safety while boosting international competitiveness.

Trade Agreements: Recent pacts with UK, EU, and New Zealand open new markets, requiring Indian industry to move beyond protectionist instincts and embrace reciprocity.

Demographic Dividend: Gauba noted India's advantages—young population, digital infrastructure, reform-oriented leadership—but stressed the need to leverage these for global production and innovation leadership.

Way Forward: Implement a phased deregulation roadmap targeting redundant compliances, establish R&D tax incentives aligned with global benchmarks, and create sector-specific innovation clusters under PPP models to boost domestic technology development.

Key terms

Regulatory Cholesterol

A term coined by NITI Aayog to describe the accumulation of redundant rules, procedures, and compliance requirements that hinder business efficiency. Relevant for GS3 (Economy) as it impacts India's competitiveness in global indices like Ease of Doing Business and World Bank's Governance Indicators.

Quality Control Orders (QCOs)

Mandatory standards issued by the Bureau of Indian Standards (BIS) under the BIS Act, 2016 to regulate product quality. For UPSC, QCOs are significant for GS3 (Economy) as they balance consumer protection with industrial growth, and feature in India's trade policy discussions.

Demographic Dividend

The economic growth potential from a working-age population bulge, a key GS1 (Society) concept. India's dividend period (2020-2055) requires complementary policies in education, skilling, and employment generation to realize its full potential, making it critical for population and development questions.

Jan Vishwas

A governance philosophy advocated by the Indian government to shift from a punitive, distrust-based regulatory framework to one rooted in trust and ease of compliance. For UPSC, this represents a significant administrative reform aligning with cooperative federalism and ease of doing business objectives under GS2 (Governance).