Scrap licences, end NOCs, curb inspector raj: NITI Aayog proposes big regulatory reset
A high-level NITI Aayog panel has pushed for a major reset of India’s regulatory regime, proposing the end of inspection raj, scrapping routine licences and permits, and shifting compliance checks to accredited third parties, Moneycontrol reported on Wednesday.
The recommendations, made by a committee led by NITI Aayog member and former cabinet secretary Rajiv Gauba, form the core of a new trust-based regulatory philosophy called the Jan Vishwas Siddhant.
According to the report of the high-level committee on Non-Financial Regulatory Reform, the panel has called for a shift to stable policy regimes, predictable rule-making, and a system where every regulation is tested for its compliance cost on businesses and enforcement burden on the government.
The committee has recommended a complete overhaul of licensing norms, the report said. It states that licensing and compliance requirements “shall be proportionate and graded by risk”, and that prior approvals in the form of licences, permits or NoCs should be required only for “reasons of national security, serious harm to public safety, human health, or environment or significant public interest, and only as provided under the statute”. Any activity not explicitly prohibited under law, it says, should not require prior permission.
On registration, the committee has reportedly said that registrations may be used to maintain databases, but should not be subject to approvals or rejections. It has further proposed that self-registration based on minimal documentation shall be the norm. Licences, permits and NoCs should ordinarily be perpetual, with limited exceptions of five- or ten-year validity only when justified by national security, public safety, health or environmental concerns.
The report proposes a complete shift in inspection practices. It recommends that inspections be based on computer-assisted randomised selection and risk assessment, and that “inspections shall be conducted by accredited third parties, as a norm”, with clear selection and performance assessment criteria publicly disclosed.
To prevent abrupt changes in regulatory environments, the panel has advised a fixed annual calendar for policy updates. New rules or amendments “shall be implemented after meaningful consultations with all stakeholders and with adequate lead time”, unless compelling reasons require immediate action.
A regulatory impact assessment framework has also been proposed to quantify compliance costs for businesses and enforcement costs for the state. The committee wants all existing and future rules to undergo this impact test.
On penalties, the panel has recommended decriminalising minor, technical or procedural offences. Criminal punishments – imprisonment or fines – should apply only to serious offences involving threats to national security or public order, harm to human health, fraud, or major environmental damage. It calls for a comprehensive review of all criminal provisions under current and proposed laws.
