# NITI Aayog Urges West Bengal to Accelerate Regulatory Reforms for Business Growth

> NITI Aayog Vice-Chairman Ashok Lahiri highlighted concerns over West Bengal's regulatory pace, emphasizing that cutting administrative hurdles and streamlining exit policies are crucial to drawing investment.

**Type:** article · **Category:** Money · **Published:** 2026-10-30 · **Source:** TrendKia
**Canonical:** https://trendkia.com/en/money/west-bengal-men-karobara-sugama-banane-ke-lie-niti-aayog-ne-niyamaka-sudharon-para-diya-jora-53579 · **Language:** English
**Tags:** West Bengal, NITI Aayog, Ashok Lahiri, Ease of Doing Business, Regulatory Reforms, Industrial Investment, MSME, Kolkata Industry

Economic expansion and fresh capital inflows into West Bengal hinge directly on deep-seated regulatory overhauls. Addressing a gathering organised by the Bengal Chamber of Commerce and Industry, NITI Aayog Vice-Chairman Ashok Lahiri voiced serious concerns regarding the state's trajectory on easing business procedures. Highlighting that economic momentum cannot be sustained without genuine institutional facilitation, Lahiri noted that West Bengal currently lags behind the nation's leading reformist states. Achieving long-term targets under the Viksit Bharat 2047 initiative demands that policy intentions transition swiftly into operational reality on the ground.

## Slow Progress on the Reform Agenda
Reviewing the prevailing business environment, Ashok Lahiri observed that West Bengal has struggled to keep pace with top-performing regional economies across the country. In his assessment, institutional hesitations and cumbersome procedural workflows continue to hold back the state's potential. "I think West Bengal does not do too well in terms of the regulatory reform agenda. Its not one of the top achievers. We must do better," Ashok Lahiri remarked during the session. He called upon local policymakers to formulate concrete, forward-looking proposals that fundamentally upgrade the operating environment for entrepreneurs and large industrial groups alike.

Lahiri pointed out that economic growth strategies remain incomplete if reforms exist solely on government paper. Attracting sustainable private investment requires tangible relief that corporate leaders, factory managers, and start-up founders can experience in their day-to-day operations.

## Navigating Overlapping Federal Jurisdictions
A central obstacle identified by the NITI Aayog Vice-Chairman lies in the dispersed nature of India's governance architecture. Administrative authority is distributed across multiple tiers, frequently creating jurisdictional overlap between central guidelines and state-level directives. Moreover, local self-government institutions, including urban municipalities and rural panchayats, exercise significant regulatory oversight in critical development sectors. Because execution happens at these foundational tiers, Lahiri emphasized that local delivery mechanisms are the true test of any reform policy.

Under the current system, obtaining industrial clearances requires navigating an array of disparate offices. Critical approvals such as changes in land use, structural building clearances, fire safety certifications, and labour compliances fall under separate jurisdictions. This fragmented architecture breeds conflicting stipulations and prolonged processing timelines. For corporate enterprises, these endless bureaucratic cycles inject severe unpredictability into project schedules and inflate capital outlays.

## Reducing the Disproportionate Burden on MSMEs
Compliance governance across disjointed public departments remains heavily fractured. Different government offices maintain isolated databases, mandate distinct reporting paperwork, and carry out uncoordinated on-site inspections. Ashok Lahiri highlighted that smaller enterprises bear the brunt of this inefficiency. Unlike diversified conglomerates equipped with dedicated legal and secretarial teams, micro, small, and medium enterprises must divert substantial shares of their limited operational budgets simply to meet administrative formalities.

To mitigate these pressures, Lahiri proposed establishing an integrated central coordinating mechanism tasked with assessing the necessity of every existing regulation. Any duplicate mandates across departments should be systematically excised. Furthermore, routine permissions for low-risk operational activities could be safely transitioned toward third-party auditing frameworks or credible self-certification systems, eliminating unnecessary bureaucratic gatekeeping.

## Reforming the Broader Economic Framework
Extending his remarks to the national landscape, Ashok Lahiri warned against the chilling effect of onerous statutory burdens, protracted administrative timelines, and the looming threat of criminal prosecution or incarceration for minor technical infractions. These elements suffocate entrepreneurial ambition, deter risk-taking, and curtail the scaling aspirations of MSMEs. Framing the imperative in strategic terms, Ashok Lahiri stated, "Regulatory reform is not merely an administrative exercise. It is an economic growth strategy."

He further observed that excessive and convoluted regulations impose direct financial costs while opening avenues for rent-seeking behaviour. In many instances, well-entrenched legacy corporations utilise high regulatory barriers to insulate themselves from competition, effectively locking out innovative new entrants. Dismantling these artificial hurdles is essential to level the playing field for budding enterprises.

## Fostering Trust and Unlocking Trapped Capital
Modernising administrative practices also requires eliminating redundant reporting cycles. Ashok Lahiri argued that state machinery must stop demanding data and certificates that enterprises have already submitted to other public repositories. He underscored the need to rebuild mutual confidence between state regulators and corporate stakeholders, advocating a balanced philosophy of "trust and verify" where oversight remains robust yet devoid of operational harassment.

In his concluding observations, Lahiri stressed the urgent necessity of facilitating smooth, time-bound corporate exits. Pointing to numerous decommissioned industrial plants and shuttered factories in and around Kolkata, he explained that prolonged exit barriers create immense structural waste. "Land is being wasted, capital is stuck up," Ashok Lahiri noted, urging the implementation of practical frameworks for winding up unviable units. Allowing stranded real estate, machinery, financial capital, and labour to be reallocated into dynamic, productive sectors will complement easier business entry and provide the foundation for West Bengal's economic revival.

## What this means for you
Streamlining regulatory clearances and releasing stranded industrial assets could significantly accelerate private investment and create substantial employment in West Bengal.

- **Across India:** Modernising compliance frameworks for MSMEs will lower operational overheads and foster a healthier startup ecosystem nationwide. Removing criminal penalties for technical infractions protects entrepreneurs from undue harassment and incentivises formal business expansion.
- **In West Bengal:** Facilitating orderly exits for defunct factories in and around Kolkata will unlock long-frozen land, machinery, and capital for viable commercial projects. Speeding up building, land use, and safety approvals will eliminate costly project delays for incoming enterprises.
- **For small businesses:** Abolishing duplicate filings across different state agencies will drastically curtail administrative costs and record-keeping burdens. Adopting self-certification for routine, low-risk activities allows small business owners to focus on operational growth rather than bureaucracy.
- **For industrial investors:** A transparent, predictable regulatory climate provides the stability required to commit long-term equity to the regional economy. Productive reallocation of idle land and infrastructure directly enhances regional manufacturing competitiveness.

## Why this happened
Overlapping departmental approvals, burdensome compliance requirements, and rigid industrial exit policies have constrained investment and business dynamism in West Bengal. Speaking at the Bengal Chamber of Commerce and Industry, NITI Aayog Vice-Chairman Ashok Lahiri detailed these systemic bottlenecks.

- **Fragmented approval mechanisms:** Enterprise setup requires sequential clearances from municipal, state, and central bodies for land use, building permits, and fire safety. The resulting jurisdictional overlap leads to inconsistent requirements and severe project execution delays.
- **Disproportionate burden on MSMEs:** Independent public agencies require separate paperwork, distinct databases, and uncoordinated inspections. This lack of data integration forces smaller firms to allocate an unsustainable share of resources to routine compliance.
- **Locked industrial assets:** Numerous defunct factory units in and around Kolkata remain trapped in prolonged closure proceedings due to complex exit barriers. As a consequence, prime commercial land, machinery, and financial capital remain completely unutilised.
- **Disproportionate punitive threats:** The presence of severe penalties, including incarceration for minor statutory infractions, discourages new business formation and opens avenues for administrative rent-seeking.

## Questions & Answers

### 1. Who called for stronger regulatory reforms in West Bengal?
NITI Aayog Vice-Chairman Ashok Lahiri emphasized the urgent need for comprehensive regulatory reforms in West Bengal.

### 2. Where did Ashok Lahiri make these remarks?
He made these comments at an event hosted by the Bengal Chamber of Commerce and Industry.

### 3. How did Ashok Lahiri evaluate West Bengal's reform record?
He stated that the state does not perform well on regulatory reforms and is not among the top-achieving states in the country.

### 4. What procedural bottlenecks do businesses encounter regarding approvals?
Clearances across land use, building permissions, labour laws, and fire safety span multiple authorities, creating overlapping rules and long delays.

### 5. How do heavy regulatory compliances impact MSMEs?
Because departments use separate forms and procedures, smaller businesses bear a disproportionately higher share of compliance costs than large firms.

### 6. What solution was proposed to streamline regulatory mandates?
Lahiri advocated a central coordinating system to eliminate duplicate requirements and suggested self-certification or third-party audits for routine matters.

### 7. What specific problem was identified concerning closed factories near Kolkata?
He warned that delays in closing unviable units leave prime land and capital stuck, calling for streamlined exit systems to redeploy these idle resources.

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