New Delhi, Dec 11 The government's Chief Economic Advisor (CEA) V. Anantha Nageswaran, on Wednesday said there is a need for striking the right balance between optimising growth and the regulatory framework in the light of global uncertainties.
Addressing the plenary session on the Future of Regulation: Balancing Innovation and Risk at the Global Economic Policy Forum 2024 organised by the Ministry of Finance and the Confederation of Indian Industry (CII), Nageswaran highlighted that financial systems require a strict regulatory approach due to their systemic impact.
He said there is a need to differentiate between regulation of financial and non-financial sectors as competition in the financial sector can lead to excessive risk-taking that can trigger instability. This was not the case with the non-financial sector, he added.
"Some sectors can self-regulate, but the interconnected nature of financial markets necessitates more vigilant oversight to safeguard economic stability," he said.
Debasish Panda, Chairman of Insurance Regulatory and Development Authority of India (IRDAI), while addressing the gathering virtually, said the overall foundation of insurance rests on making insurance simple, available, accessible, and most importantly, affordable.
He concluded the session by addressing that regulations are designed to balance innovation and risk, ensuring the business ecosystem grows responsibly without compromising stability.
Ravneet Kaur, Chairperson, Competition Commission of India highlighted that the Commission is mindful of India's growing startup ecosystem and tailors its regulations, accordingly, ensuring fair competition while fostering innovation.
Timely decision-making, especially regarding mergers and acquisitions, is crucial for sustaining growth, and the Commission provides clear guidance for parties involved, she added.
K. Rajaraman, Chairperson, International Financial Services Centres Authority (IFSCA) highlighted how regulation should guide and provide an overall structure while allowing room for growth.
This balance is essential for fostering innovation over the next 25 years as part of Amrit Kaal.
He emphasised the importance of balancing regulation with innovation, particularly in a globalised and inter-connected economy.
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