Kolkata, Oct 30 (PTI) NITI Aayog Vice-Chairman Ashok Lahiri on Friday expressed concern over West Bengal’s performance in regulatory reforms, as he advocated improving ease of doing business to attract fresh investments.
Lahiri was speaking at an event organised by the Bengal Chamber of Commerce and Industry here.
“I think West Bengal does not do too well in terms of the regulatory reform agenda. It’s not one of the top achievers. We must do better,” he said.
Calling for deeper state-level reforms, he said West Bengal should suggest measures to improve the business environment, attract more investment and accelerate economic growth to help achieve the vision of ‘Viksit Bharat 2047’.
Pointing out that India’s federal structure involves shared and overlapping regulatory jurisdictions between the Centre, states and, in several areas, municipalities and panchayats, Lahiri said effective implementation of reforms at the state and local levels was indispensable.
Land use, building approvals, labour administration and fire safety involve multiple state and local authorities, often resulting in overlapping requirements and procedural delays, he said.
Regulatory burdens are frequently spread across departments, each having its own forms, databases and inspection practices, with smaller businesses bearing a disproportionate share of the compliance costs, he said.
Advocating a central coordinating mechanism to review the necessity of individual regulatory requirements and eliminate duplication, Lahiri said routine permissions in low-risk activities could be shifted towards self-certification or third-party verification.
He also called for a broader overhaul of India’s regulatory framework, saying excessive compliance requirements, procedural delays and the threat of imprisonment for minor violations were discouraging entrepreneurship, constraining MSME growth and raising the cost of doing business.
“Regulatory reform is not merely an administrative exercise. It is an economic growth strategy,” he said.
Excessive regulation, he said, not only imposes direct financial and administrative costs but also creates opportunities for rent-seeking, while larger established companies can sometimes use regulatory barriers to restrict competition from smaller enterprises.
Lahiri advocated reducing repetitive filings and unnecessary paperwork, pointing out that businesses should not be repeatedly asked to furnish information already available with the government.
He also stressed the need to build trust between the administration and industry.
“Trust and verify,” he said, adding that industry, too, should be subject to scrutiny rather than being trusted unconditionally.
Making a case for easier business exits alongside easier entry and expansion, Lahiri drew attention to the large number of closed factories in and around Kolkata, saying the inability to shut down unviable businesses in an orderly and timely manner had resulted in substantial economic waste.
“Land is being wasted, capital is stuck up,” he said.
Expeditious closure would release land, machinery, labour and finance for more productive uses, the NITI Aayog vice-chairman said.
Lahiri also argued for a calibrated approach to penalties, favouring monetary fines over imprisonment for minor procedural and technical violations. He, however, said serious offences involving fraud, corruption, adulteration and public harm must remain subject to criminal liability.
Referring to the Jan Vishwas amendments of 2023 and 2026, he said the government had taken steps to decriminalise minor technical and procedural defaults, and replace several imprisonment provisions with civil penalties and graded monetary fines.
On India’s reform journey, he described the Goods and Services Tax (GST) as a major success in integrating the domestic market and simplifying taxation, with collections rising from Rs 8.8 lakh crore in its initial nine months in 2017-18 to Rs 22.27 lakh crore in 2025-26.
He also highlighted the role of the Insolvency and Bankruptcy Code (IBC) in releasing locked-up capital.
Commenting on West Bengal’s industrial potential, Lahiri wondered why the state had not attracted more defence manufacturing units despite having established ordnance facilities at Dum Dum and Cossipore.
“Why more defence industries are not coming up in West Bengal? I hope the industry minister will look into the matter,” he said. PTI BSM RBT
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