The document discusses the regulatory framework for industry in India and the government's role in intervention and regulation. It outlines the various stages of industry formation and highlights the many laws and government agencies that businesses must interact with. While some level of government intervention is necessary, the document argues that a shift towards more quality-focused and catalytic intervention is needed to reduce red tape and promote entrepreneurship. Reforming government administration and mindsets is key to improving the business environment.

1. REGULATORY FRAME WORK Suneel Gupta Associate Professor GHS-IMR Kanpur

3. Type of Intervention Formal and Informal control Coercive and Inductive Control Direct and Indirect Control Effect off Competition Promotion and R egulatory Control

4. Formation Stage Industrial policy Companies Act I.D.R. Act FERA Act. Control of capital Issue (1951) S.E.B.I. Financial arrangement with development banks Allotment of land by concerned state government Sanction of factory plan by concerned state government Import- Export know-how F.I.P.B. FEMA

5. Construction Stage Allotment of Iron & Steel & Allotment of cement(NA) Sanction of electricity board Long term loan (if required) with IDBI, IFCI, Banks And SFCIs

6. Machinery procurement & installation Import good license Opening of LC with banks Custom clearance

9. PERSONNEL Factories Act ESI Act Workmen’s compensation Act Payment of wages Act Minimum wages Act Payment of bonus Act Industrial dispute Act Trade union Act Provident fund Act Payment of Gratuity Act Maternity Benefit Act Apprentices Act Equal Remuneration Act Exist Policy

11. SIA DEA SIA FC DEFENCE R&D NRDC CSIR DST DGTD FIPB ADMINISTRATIVE MACHINERY PLANNING COMMISSION COMMERCE MINISTRY DC SSI MINISTRY OF INDUSTRY FIPB SIA TECH.DEV COMMITTEE CABINET SIA APPROVAL Large cases Ordinary cases Procedure for Foreign Collaboration

12. AND NOW FIPB SIA RBI

16. A PARADIGM SHIFT IS NEEDED A case of classic clash between entrepreneurs and bureaucracy A entrepreneurial sprit has to be displayed by government as shown for Green revolution. Resources for development are more efficiently deployed if the central government & state government act as catalyst and Regulator –not as executor of development.

17. Junior engineer actually sees nothing wrong in offering another plot Instead of the one that was promised for Mr. Alok Aslok’s experience shows how Indian entrepreneurs have to take on additional management burden called “managing the hassle factor “ It is important to get to the root cause of this hassle factor

18. In past entrepreneur already faced government officials but now echelons of government are promoting their state as haven of entrepreneur . 2% of officer in government workforce gets 100% of training. Training sessions require –awareness of the meaning of the government as catalyst.

19. Each employees in government department see himself as a catalyst of economic development ( job opportunity for junior engineer son tomorrow) Government structure to ensure that head of relevant department have long enough tenures to be accountable for departments. A bit of “frontier sprits “ is needed that made America great in last century is still a key success factor in business.

20. CHAMPIONING REFORMS AT THE TOP IS NECESSARY ,BUT NOT SUFFICIENT. THERE IS NEED FOR COMMITMENT AND OWNERSHIP OF THE REFORMS ETHOS DOWN THE LINE NRI COME ,NRI DESPAIRS,NRI GOES BACK, ( Indians have proved their success at world level, now wanted to return home and with their money and expertise, do something in country of their birth)

21. Finally a word of advice to Alok and his ilk, Do not despair, India is changing, albeit slowly Do not look for the quick buck. Come here for the long haul. You will find reward and fulfillment