MUMBAI: States and municipalities will have to drive the next phase of India’s deregulation, with reforms in areas such as land use, building permits, pollution consents and business licences critical to making it easier to do business, NITI Aayog member Rajiv Gauba said.Speaking at the Global Fintech Fest, Gauba said the next generation of reforms should focus on making the everyday task of doing business simpler, rather than only pursuing large, headline-grabbing measures. He said India needed to move beyond the persistence of the “Inspector Raj” by scrutinising the maze of laws, regulations, permissions, registrations and renewal requirements imposed by governments at the Centre, state and city levels.“The next generation reform has to be to liberate the industry and citizens at large from this stifling chokehold of rules, regulations, permissions,” Gauba said.The approach, he said, should be based on trust, with regulations tested against the principle of “Jan Vishwas”. Licences should be required only for activities involving national security or serious risks to human health or the environment. In other cases, registration should be automatic rather than subject to a government “yes or no”. Where licences are necessary, they should have perpetual or long-term, 10-year validity, while inspections should be risk-based rather than random.Gauba pointed out that several areas that directly affect investment and economic activity, including land-use changes, building permits, pollution consents and various business licences, fall within the jurisdiction of state and municipal governments.The Centre, he said, should promote model regulations, share templates and best practices and create incentives for states to implement them. Central transfers and fiscal support can be linked to reforms, with the Special Assistance Scheme for Capital Investment and the Urban Challenge Fund providing examples of funding being tied to reforms and projects.One major opportunity lies in easing building regulations. Gauba said changes to requirements relating to setbacks, ground coverage and parking could unlock five to six times more built-up area. This could allow hospitals to add floors and hotels to build more rooms, while increasing land supply could help reduce hotel tariffs by 35% and make affordable housing more accessible.
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Tourism and hospitality also need deregulation, he said. Tour operators currently require various state-level permits despite holding an All India Tourist Permit, while hotels face multiple health, trade and liquor licences across venues and locations. The committee has recommended sweeping reforms in these areas, and the deregulation task force is now working with states to implement them.