Entrepreneurship in India has long been shackled by a legacy of overregulation, a remnant of the Licence Raj era that stifled innovation and growth. But what if the key to unlocking India’s entrepreneurial potential lies in a radical shift from permission-based governance to trust-based deregulation? The Jan Vishwas Siddhant (Principle of Trust) promises to do just that, addressing six critical pathologies that have long held back India’s entrepreneurs, economic prosperity, and global ambitions.
Here’s where it gets controversial: While some argue that deregulation could lead to chaos, the reality is that entrepreneurship thrives not in the absence of rules, but in the presence of fair, transparent, and trust-based systems. For instance, Pakistan’s Swat Valley, despite its challenges, is not a hub of venture capital—proving that lawlessness does not breed innovation. Instead, India’s regulatory cholesterol—layers of unnecessary approvals, proliferating instruments, and unenforceable laws—has created a system where compliance becomes punishment, and corruption thrives in the shadows of ambiguity.
The first pathology is the culture of prior approval. Growing up in Kashmir, I fondly recall my parents politely asking, “Ijaazat hai?” (Do we have permission?) before leaving a host’s home. Yet, as a first-generation entrepreneur, I’ve spent decades grappling with the opposite question: “Who allowed you to do this?” This isn’t just a bureaucratic hurdle; it’s a constitutional contradiction. Innovation, by its very nature, is permissionless, and the right to conduct business is enshrined in Article 19 of our Constitution. Yet, entrepreneurs face a labyrinth of 500 central and 3,200 state-level approvals—a system that stifles creativity and rewards red tape.
The second pathology is instrument proliferation. Our Constitution envisions a simple framework: laws made by Parliament and rules by the executive. However, our administrative state has spawned a monster of subsidiary legislation—notifications, guidelines, circulars, and more—often unnotified and carrying penal sanctions. Policymakers see a linear process: Act + rules. But entrepreneurs navigate a maze: compliances + 16 non-law, non-rule instruments + rules + Acts. Our estimate? Over 12,000 such instruments burden employers, far exceeding the 700-plus Acts and their accompanying rules.
And this is the part most people miss: The compliance blind spot. Policymakers focus on substantive provisions but lose sight of the cumulative burden. Regulation should target outcomes, not micromanage processes. Yet, by 2025, entrepreneurs faced over 69,000 compliances. While recent labor code reforms reduced this burden by 75%, this rationalization must extend across sectors in 2026.
The fourth pathology is enforcing the unenforceable. Noble intentions, like a single inspector overseeing 3.3 lakh weighing instruments, breed corruption and inefficiency. Unenforceable laws are a poor substitute for genuine reform. The state must prioritize performance management for its 25 million civil servants and focus on actionable, measurable goals rather than lofty promises.
The fifth pathology is process as punishment. Jail provisions in laws are rarely enforced but often used as threats, clogging courts. The criminalization of cheque bouncing, for instance, has led to 43 lakh cases, accounting for 10% of court pendency. This system creates an unjust equilibrium, where the innocent suffer from disproportionate penalties and endless delays.
The sixth pathology is the absence of a single source of truth. Entrepreneurs often fall prey to corruption because regulatory “truth” is unverifiable, outdated, or incomplete. A live, comprehensive digital database—like IndiaCode integrated with e-gazette—would guarantee transparency and ensure no one is held accountable for obligations not listed.
The Jan Vishwas Siddhant offers a transformative solution. It replaces licenses with perpetual self-registration, except in critical areas like national security and public health. Inspections will be risk-based and third-party-driven. Punishments will be proportionate, and regulatory changes will follow consultation and adequate transition periods. Digitization will streamline filings, and IndiaCode will become the single source of truth for all obligations.
But here’s the bold question: Can India truly transition from praja (subjects) to nagrik (citizens) by trusting its entrepreneurs? Critics may argue that deregulation risks accountability, but history shows that trust-based systems foster innovation and accountability. By freeing entrepreneurs from the ijaazat culture, we shift their focus to koshish (effort). As poet Sohanlal Dwivedi aptly said, “Koshish karne waalon ki haar nahin hoti” (Those who keep trying never lose).
The Jan Vishwas Siddhant isn’t just policy reform—it’s a cultural shift from ruling to governing. It’s about recognizing that entrepreneurship is iterative hypothesis testing, not rigid planning. With 6.3 crore enterprises in India, only 30,000 have paid-up capital over Rs 10 crore. This isn’t a cultural or circumstantial issue—it’s a direct consequence of economic choices. By addressing regulatory cholesterol, we can unlock India’s potential, create non-farm jobs, and empower entrepreneurs to build a prosperous, globally competitive nation.
What do you think? Is trust-based deregulation the key to India’s entrepreneurial future, or does it risk opening the floodgates to chaos? Share your thoughts in the comments—let’s spark a conversation that shapes the future of Indian entrepreneurship.
