Government regulations are basically roll back of free market. In any country, even those manned by most honest bureaucrats, they slow down economy. In a country like India, where 90% of those who can be corrupt are corrupt, regulations just enable the outright extortion by government machinery. And effect on economy is same as that of extortion by crime syndicates: Economic activities wither away.
UPA government enacted regulations upon regulations, particularly in the areas of Environment, land, forests, and labour; which are holding back our recovery. Modi must move to dismantle the regulation regime immediately.
Over at mises.org, Peter St. Onge has a very good analysis of regulation’s effect on the US economy:
“Comparing the productivity numbers to regulatory pages matches up pretty well: pre-1971 real GDP ran at 2.4 percent. Since 1971, it’s run at 1.8 percent. Still, the big drop-off since 2001 isn’t simply explained by pages — there was no big jump in 2000 in Federal Register pages.
So the timing’s not perfect, but there are other comparisons we should make as well. Specifically, we need to look at other countries because our view of the causes of the slowdown will change depending on whether or not all countries are experiencing a slowdown, or just certain countries.” (from the article)
Read the whole article here.
