Regulators Must Find Equilibrium for Growth Optimization: CEA Nageswaran
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New Delhi, Dec 11 (NationPress) The Chief Economic Advisor (CEA) of the government, V. Anantha Nageswaran, stated on Wednesday that it is essential to achieve the appropriate balance between optimizing growth and the regulatory framework given the current global uncertainties.
While speaking at the plenary session titled Future of Regulation: Balancing Innovation and Risk during the Global Economic Policy Forum 2024, organized by the Ministry of Finance and the Confederation of Indian Industry (CII), Nageswaran underscored the necessity for a stringent regulatory approach within financial systems due to their systemic implications.
He pointed out the importance of differentiating between the regulation of financial and non-financial sectors, as competition in the financial domain may lead to excessive risk-taking, potentially resulting in instability, a concern that does not extend to the non-financial sector.
"Certain sectors can manage self-regulation; however, the interconnectedness of financial markets demands heightened scrutiny to protect economic stability," he remarked.
Debasish Panda, Chairman of the Insurance Regulatory and Development Authority of India (IRDAI), who addressed the assembly virtually, mentioned that the core principle of insurance should be to make it simple, available, accessible, and above all, affordable.
He concluded the session by stating that regulations are crafted to harmonize innovation and risk, ensuring that the business ecosystem can thrive responsibly without jeopardizing stability.
Ravneet Kaur, Chairperson of the Competition Commission of India, noted that the Commission is aware of India's expanding startup ecosystem and adjusts its regulations accordingly, promoting fair competition while nurturing innovation.
She added that timely decision-making, particularly concerning mergers and acquisitions, is vital for maintaining growth, and the Commission offers clear guidance to involved parties.
K. Rajaraman, Chairperson of the International Financial Services Centres Authority (IFSCA), emphasized that regulation should provide direction and a comprehensive structure while allowing space for growth.
This equilibrium is crucial for stimulating innovation over the next 25 years as part of Amrit Kaal.
He stressed the need for balancing regulation with innovation, especially in a globalized and interconnected economy.
