Krishna Ella, Executive Chairman, Bharat Biotech International Ltd, wants the regulatory system overhauled, so as to ease inflow of foreign direct investments into the life sciences sector. ‘

Calling regulations “a major hurdle”, Ella observed that startups in life sciences were facing huge challenges.

“The ₹1 lakh crore corpus allocated for driving R&D and innovation would not serve the purpose if the current regulatory system continued,” he said, at a ‘breakfast with businessline’, a meeting of businessmen with V Anantha Nageswaran, Chief Economic Advisor to the government of India. The meet was organized by businessline and the event was at ITC Grand Chola hotel, on Tuesday.

“In India, the regulatory system suspects everybody as a thief, and in the process, every file goes through too much scrutiny and too many Ministries. For example, in the life science sector, we had to handle five ministries in the regulatory process. Today, no startup can succeed in the life science sector. However, the IT sector is a predictable system because there are no regulatory hurdles. So, they are successful. So the life science sector is highly regulated and the startup ecosystem is choked in the life sciences sector,” he added.

He said India could follow the regulatory system in the US or Singapore to make things happen.

Responding to his observations Nageswaran admitted that a cultural shift needs to happen pertaining to regulatory systems. There is a need to evolve and move towards a regulatory framework where we have to make a trade-off or a choice between facilitating economic activity or making sure that economic activity is compliant first.

“Which one is more important? That subject is being debated by the governments.”

Ella also raised concerns over the poor skillset in the country. “We have highly educated paper degrees, but the skill set is not there,” he said adding, “Academic institutes are interested only in securing funds from private corporates. Like corporates, educational institutions should also have responsibilities in addressing skill gaps. Institutions like IITs could ramp up their skill-related training not only for students but also teachers.”

Industry and academia have more roles to play on the skill side, he said, adding that both should have a mechanism for dialogue or framework regularly for skill development to happen.

“While the government has set up a ministry and has launched several skilling initiatives for various sectors, more action has to happen in terms of the active industry, academia, and dialogue. Skill development eventually is a demand-side requirement of the industry and the supply comes from the academia or the educational institutions, while the government provides the facilitative mechanisms and provides funding, etc. So, there is much room for action between the non-government players themselves,” he added.

Discussing the ease of doing business and compliances, Satyakam Arya, MD & CEO of, Daimler India Commercial Vehicles highlighted the mammoth compliance process they had to follow in a recent financial exercise. “There were about 4700 compliances which we have followed and that’s pretty big,” he said,.

He said the country needs to change its approach. Currently, we are more focused on the ‘ease of starting a business’ than ‘ease of doing the business’. With our federal structure, it becomes quite complex. I think we need a fresh approach here and an incremental approach will not work. If we can create a Council where the central government with the state governments can regularly review and dramatically bring this down, it will help every one of us, he added.

Responding to his views, Nageswaran agreed though doing business has become easier when compared with 10-12 years ago, there are still a set of issues to be addressed. “Of course, a lot of attention and focus has gone into it and in several areas, things systems have improved. But the amount of work that remains to be done is equally substantial.

Srivats Ram, Managing Director, Wheels India, stated that as India is progressing towards a developed economy, it is facing a big challenge - global trade is coming down and trade has been a big part of the 10 per cent type of growth rates that countries like Korea and China had when they moved from being a developing to a developed economy. But India may not have that type of trajectory on the International trade side. He sought CEA’s views on the mix of domestic and export going forward that would take India into developed economy status. 

Responding to this, Nageswaran said that though the average global GDP growth is three per cent now when compared with five per cent during 2003-2010, he did not see exports as being any less important. “India may have an opportunity to provide the scale as a substitute for China. Given that we do have still a huge investment need compared to domestic savings -- which means we have a current account deficit -- the more exports we can generate, the more we are going to make it easy to keep the current account management,” he said.

P Ravichandran, President, Danfoss India recommended that the institutional repositioning of the Bureau of Energy Efficiency is much needed right now because today the Energy Efficiency Bureau is sitting under the Ministry of Power. It has to navigate the Ministry of Climate Change, the Ministry of External Environment, and several other ministries including DPIIT, and the Ministry of Finance, he said.

In most countries, such as Indonesia, the net zero targets are under the Prime Minister’s office and it is easy to attract more global funds as well. So the institutional repositioning of the Bureau of Energy Efficiency will be of great help.

Silai Zaki, Australian Consul General in Chennai posed a question to the CEA: In a perfect world what three reforms would you introduce in India to ensure it reaches the growth targets?

Nageswaran replied that the first focus would be to ensure ease of doing business for MSMEs in the country is attained. “Because for them, the management bandwidth is limited and the amount of time and resources they dedicate to compliance is substantial – both at the Central and State levels. This needs to be addressed,” he said.

The second focus area, he said, is energy security – this is not more of reform, but that is a reform element implicit in it. Reforming the power distribution companies and making power generation economically viable will be important. In this, we also have to navigate the challenges we are facing on energy transition from the developed world where the discourse is quite uneven, unbalanced, and even unfair. “it is more a geopolitical challenge than a domestic reform challenge,” he added.

The third area is to ensure an adequate supply of skilled labour for the industry. While it is beneficial for the industry, it will result in creating income generation for the Indian youth. “This is how India can reap the demographic dividends. Therefore continuous attention to learning and skilling outcomes will be important,” he said.