Deregulation drive has to originate in states

small enterprises to unlock potential growth is a well-considered piece of advice to the central and state governments. Indian small enterprises shoulder a larger compliance burden relative to larger rivals, which limits their ability to grow. Labour-intensive small enterprise offers more inclusive growth if India switches to risk- and trust-based regulation.

This aligns rules to enforcement capacity and can thereby make doing business easier. Since most of the micromanagement of economic activity is conducted by states, the deregulation drive will have to originate there. That requires a larger group of stakeholders to come in board, which lengthens the process.

Proactive states are dismantling factor market rigidities, but the pace is uneven. The Centre, on its part, can lead by example.

Deregulation alone won't take India from 6.5% growth to the 8% it needs to sustain in order to reach developed economy status. But it is a good starting point.

India needs to work harder on the returns to investment than on the volume of investment to generate high growth. The global environment is becoming more regulated and economies that ease internal constraints stand a better chance of carving out bigger slices of manufacturing exports. India's small enterprises can contribute to this endeavour if governments become sensitive to factors stunting their growth.

The survey makes a case for India to improve its competitiveness amid rising protectionism.

Environmental concerns will guide restrictive policies against Indian exports and the country needs a strategic roadmap for trade. It also needs a nuanced approach to energy transition that does not hobble growth prospects. The economy is fairly deregulated for FDI, but there is