PM Urges State Bureaucrats to Accelerate Deregulation for Ease of Business

Answer: D

Statement 1 is correct. The Jan Vishwas Bill, 2023, was enacted to decriminalize minor offences across 42 Central Acts, converting imprisonment penalties into monetary penalties, thereby reducing the compliance burden on businesses and citizens. Statement 2 is correct. A regulatory sandbox allows regulators to create a controlled environment where new financial products, services, and business models can be tested without immediately incurring all the regulatory costs and consequences. While primarily associated with finance, the concept can be extended to other sectors. Statement 3 is correct. Many critical aspects of doing business, such as land acquisition, construction permits, environmental clearances, and labour regulations, fall under the purview of state governments. Therefore, state-level administrative reforms are crucial for overall improvement in ease of doing business.

Answer: B

Statement 1 is incorrect. The First ARC (1966-70), headed by Morarji Desai and later K. Hanumanthaiya, covered a wide range of subjects including the machinery of the Government of India and its procedures, state administration, district administration, financial administration, personnel administration, economic administration, and citizen grievances. While it touched upon financial administration, its focus was much broader than just PSUs and financial administration. Statement 2 is correct. The Second ARC (2005-2009), headed by Veerappa Moily, produced 15 reports covering various aspects of public administration. Its reports like "Right to Information: Master Key to Good Governance" and "Citizen Centric Administration: The Heart of Governance" strongly recommended RTI and Citizen's Charters. Statement 3 is correct. 'Minimum government, maximum governance' is a core principle of administrative reform advocated by the current government. It aims to streamline government functions, reduce red tape, promote deregulation, and empower citizens and businesses by reducing unnecessary state intervention, thereby fostering ease of doing business.

Answer: C

Statement A is correct. MSMEs often lack the dedicated legal and administrative teams that larger corporations have, making it harder and more expensive for them to navigate complex regulatory frameworks. Statement B is correct. A lower compliance burden signals a more predictable and business-friendly environment, which is attractive to foreign investors looking for ease of entry and operation. Statement C is incorrect. While financial costs (like taxes) are part of the overall business cost, 'compliance burden' is a broader concept. It refers to the time, effort, and resources (both financial and human) that businesses must expend to understand, interpret, and adhere to various laws, regulations, and reporting requirements. This includes obtaining licenses, permits, filing various forms, maintaining records, and ensuring adherence to labour, environmental, and other sectoral laws, not just taxes. Statement D is correct. Simplifying regulations (making them easier to understand and follow) and decriminalizing minor, non-serious offences (reducing the fear of imprisonment for procedural lapses) are direct ways to reduce the burden on businesses.

Answer: D

All four practices are considered effective tools for improving regulatory governance and reducing compliance burden. 1. Regulatory Impact Assessment (RIA): This involves systematically evaluating the potential costs and benefits of new regulations before they are implemented. It helps ensure that regulations are necessary, effective, and proportionate, preventing undue burden. 2. Sunset Clauses: These are provisions in a law or regulation that specify an automatic expiry date unless renewed by legislative action. They ensure that laws are periodically reviewed for their continued relevance and effectiveness, preventing outdated or redundant regulations from persisting. 3. Co-regulation: This involves a partnership between government and industry where industry bodies take on significant responsibility for developing and enforcing regulatory standards, often under government oversight. It can lead to more practical and industry-relevant regulations, reducing the burden of top-down enforcement. 4. Single Window Clearance: This mechanism streamlines the process of obtaining various licenses, permits, and approvals from different government departments through a single point of contact. It significantly reduces the time and effort businesses spend navigating bureaucratic procedures.