Beyond Deregulation: Building the Regulatory Capability for Viksit Bharat

I. From Political Independence to Institutional Capability

India enters its 80th year of Independence with an ambition that would have seemed extraordinary in 1947: to become a developed nation by 2047. The vision of Viksit Bharat is not simply an aspiration for a larger economy. It implies the development of capabilities across manufacturing, agriculture and food processing, technology and innovation, infrastructure, defence, energy and the green and blue economies. In their Independence Day addresses, President Droupadi Murmu (in the I-Day eve address) and Prime Minister Narendra Modi placed considerable emphasis on the people and institutions that must carry this transformation forward — students, scientists, engineers, entrepreneurs, workers, and public institutions.

Yet ambitious development requires not only productive capabilities, but also institutions capable of governing the increasingly complex economy that those capabilities will create.

This brings regulation into an important but often misunderstood part of the Viksit Bharat conversation.

India's regulatory debate is frequently framed as a choice between regulation and growth. Regulation is described as a source of friction, while deregulation is presented as a prerequisite for entrepreneurial dynamism. There is certainly a case for eliminating obsolete rules, simplifying procedures and reducing unnecessary compliance. But this argument becomes problematic when regulation itself is treated as the problem.

The real question is more fundamental: what kind of regulatory institutions does a technologically advancing, industrialising and increasingly sophisticated India require?

A semiconductor industry, a nuclear-fusion startup, a food-processing company, an e-commerce platform and a physical-AI enterprise do not generate the same risks, require the same knowledge or demand the same regulatory architecture. Yet all require institutions capable of understanding what they are regulating.

This article argues that regulation is a knowledge-intensive public function. Regulatory reform should therefore not be reduced to adding rules or removing them. It should mean building institutions capable of acquiring specialist knowledge, generating reliable technical evidence, exercising informed judgement, enabling compliance, enforcing standards proportionately and continuously learning from the industries they govern.

India therefore needs neither regulation romanticism nor deregulation absolutism.

It needs regulatory capability.

And, just as India's Independence created the political freedom to determine its own development path, Viksit Bharat will require the institutional capability to understand, govern, and build that future.

II. Reform Regulation by Conviction, Not by Compulsion

Every few weeks, the Indian policy debate returns to a familiar proposition: regulation is holding back growth, and deregulation is therefore the route to greater investment, entrepreneurship and economic dynamism. There is some truth beneath this argument. Obsolete rules, duplicated approvals, opaque procedures and disproportionate compliance burdens can impose real costs, particularly on smaller firms. Regulatory reform is necessary.

But reform should begin with diagnosis, not ideology.

Regulation is not a single object. Financial supervision, competition policy, food safety, pharmaceutical approval, aviation safety, environmental protection, telecommunications, and emerging-technology governance exist for different purposes and operate against different kinds of risk. A rule that appears burdensome in one context may be the institutional mechanism that makes an entire market trustworthy in another.

The distinction matters because markets depend upon trust. Consumers need confidence that food is safe, medicines are genuine and aircraft are maintained properly. Investors need reliable information. Businesses need predictable standards. Exporters need credible certification. Financial systems require prudential safeguards precisely because the consequences of systemic failure extend far beyond the institution that caused it.

The question, therefore, should not be whether a regulation creates friction. Almost every meaningful regulation creates some friction. The question is whether that friction is justified by the public purpose it serves, whether the rule is proportionate to the risk, and whether the same objective can be achieved more efficiently.

This suggests a different philosophy of regulatory reform: reform by conviction, not by compulsion.

Before removing a rule, policymakers should ask what problem it was designed to solve, whether that problem still exists, whether the rule is actually effective, and whether technological or institutional changes have created a better way of achieving the same outcome. Before adding a new rule, they should ask equally difficult questions about necessity, proportionality, and implementation.

This approach does not defend regulatory inertia. On the contrary, it demands that regulators themselves become capable of learning and changing. A strong regulator should be willing to retire ineffective rules, simplify compliance, adopt digital processes, and move from paperwork-based supervision towards measurable outcomes where appropriate.

The objective is therefore neither maximum regulation nor minimum regulation.

It is high-quality regulation: regulation proportionate to risk, grounded in knowledge, transparent in operation, and capable of evolving with the economy it governs.

That distinction is central to India's next phase of development. A country seeking to build new industries cannot afford either regulatory neglect or regulatory dogmatism. It needs institutions capable of knowing when to regulate, what to regulate, how much to regulate — and, equally importantly, when an existing form of regulation has ceased to make sense.

III. Before Regulation: Recognising the Activity

Regulation cannot begin effectively if the activity being regulated has not first been properly recognised. This may sound obvious, but India's rapidly changing economy contains many activities that have outgrown the institutional categories through which government views them. An industry can acquire consumers, investors, skilled workers, and substantial economic significance while remaining, administratively, an orphan.

India's ceramics ecosystem illustrates the problem. Ceramic cookware, traditional pottery, industrial ceramics, and advanced technical ceramics belong to a broad technological continuum, yet their economic and institutional dimensions span mining, materials science, manufacturing, consumer products, and advanced engineering. India possesses raw materials, established clusters, and academic expertise; but these capabilities do not automatically constitute a recognised industrial ecosystem. The absence of a coherent institutional identity can therefore prevent standards, skills, testing infrastructure, and industrial policy from developing around an emerging opportunity.

Recognition, however, should not automatically mean creating another regulator.

E-commerce provides a useful counter-example. It has become a significant economic infrastructure connecting manufacturers, wholesalers, retailers, consumers, logistics providers, and millions of small businesses. Yet many of the challenges it creates — logistics infrastructure, competition, worker conditions, digital trust, market access and interoperability — do not necessarily require a single dedicated e-commerce regulator. They require coordination among existing institutions and, in some cases, new forms of shared infrastructure and governance.

The first task, therefore, is not to regulate an emerging activity but to understand and classify it.

Government should ask: 

What exactly is emerging? 

Which existing institutions already cover its different dimensions? 

Where are the gaps? 

Which risks are genuinely new? 

Which functions require coordination, standards, monitoring, or enforcement? 

And, which can remain within existing regulatory frameworks?

This suggests a broader institutional pathway:

Emergence → recognition → definition → coordination → standards → monitoring → regulation where necessary.

Such a sequence prevents two opposite errors. The first is institutional neglect, where a consequential industry remains invisible because it does not fit an existing administrative category. The second is regulatory proliferation, where every new economic activity automatically acquires another layer of bureaucracy.

A mature regulatory state should do neither. It should first develop the knowledge to recognise what is changing, and only then determine what institutional response that change actually requires.

IV. Institutional Design Must Follow the Sector

Once an activity has been recognised, the next question is not automatically, ‘Which regulator should govern it?’ It is: what institutional functions does the activity actually require?

Different sectors may need different combinations of coordination, standards, testing, certification, monitoring, licensing, enforcement, compliance assistance, and strategic governance. Some may require a dedicated regulator. Some may be adequately served by an existing institution with an expanded mandate. Some may require coordination among several institutions. Still others may initially require standards and scientific capability rather than formal economic regulation.

This distinction becomes particularly important as India enters technological domains where regulatory categories are still evolving. Nuclear fusion is one example. Startups entering fusion have sought greater regulatory clarity because technologies that were previously confined largely to research environments are beginning to move towards commercialisation. The regulatory challenge is not simply to decide whether nuclear fusion should be regulated. It is to develop sufficient technical understanding to determine what risks exist, which existing rules are relevant, and where genuinely new regulatory frameworks may be necessary.

Physical AI presents a different challenge. An autonomous or semi-autonomous machine may simultaneously involve artificial intelligence, robotics, electronics, sensors, industrial machinery, workplace safety, cybersecurity and, eventually, consumer safety. No single conventional industrial classification necessarily captures the entire system. Its regulation may therefore require several specialist institutions to understand different dimensions of the same technology, with mechanisms for coordination where their jurisdictions intersect.

This suggests that regulatory architecture should follow the characteristics of the activity, rather than forcing every activity into an identical institutional template.

The principle also guards against the opposite mistake: creating a regulator simply because an industry has become fashionable or politically visible. Institutional proliferation can produce overlapping mandates, competing interpretations and additional compliance costs without necessarily improving safety, quality or market integrity.

The appropriate response is therefore diagnostic. Government must determine the nature of the activity, the risks it creates, the knowledge required to understand those risks, and the institutional functions necessary to manage them.

Only then should it decide whether the answer is a new regulator, an expanded existing regulator, a coordinated regulatory arrangement, or primarily a system of standards, testing and compliance support.

Good regulatory design begins not with the institution one already has, but with the activity one needs to understand.

V. The Regulator as a Knowledge Institution

If regulatory architecture must follow the activity being governed, then the institution itself must possess the knowledge necessary to understand that activity. This sounds straightforward, but it has a significant implication: regulation is not primarily a clerical function of applying rules. It is a knowledge-intensive public function.

A regulator overseeing food safety needs to understand microbiology, chemistry, toxicology, processing, and packaging. A financial regulator needs expertise in markets, accounting, risk, and increasingly complex financial technologies. A semiconductor regulator, if India develops regulator (or a coordinator of these functions across existing institutions) would require knowledge of materials, fabrication, packaging, electronics, intellectual property, and global supply chains. A regulator dealing with physical AI may need expertise spanning artificial intelligence, robotics, electronics, machinery, and safety.

No single generalist can possess all this knowledge. Nor can an institution acquire it once and assume that it will remain sufficient. Industries evolve, technologies change, risks migrate, and new business models emerge. Regulatory knowledge must therefore be both specialised and continuously renewed.

This suggests three distinct dimensions of regulatory capability.

Knowledge asks: What is happening? What technology is changing, what risks are emerging, how is the industry evolving, and what does scientific evidence tell us?

Operations asks: How does the institution act? How should standards be implemented, inspections conducted, evidence collected, licences administered and violations addressed?

Wisdom asks: What should the institution do? How should competing public interests be balanced? When should a rule be strengthened, simplified or withdrawn? When does a genuine risk justify intervention, and when would intervention itself create unnecessary economic or social costs?

The distinction matters because technical knowledge alone does not make a good regulator. A laboratory can establish that a substance exceeds a safety threshold; it cannot, by itself, determine the appropriate regulatory response. Conversely, a senior administrator may possess considerable institutional experience but lack the technical knowledge required to interpret new scientific evidence.

A mature regulator therefore needs an institutional architecture in which knowledge, operations, and wisdom reinforce one another.

This also changes how regulatory reform should be understood. Strengthening a regulator does not simply mean giving it more powers, more inspectors, or more rules. It means giving it the intellectual capacity to exercise its powers intelligently.

The regulator should consequently be understood as a knowledge institution that exercises public authority: an institution that acquires knowledge, evaluates evidence, applies judgement, acts upon the regulated ecosystem, and learns from the results of its own decisions.

VI. The Internal Architecture: Wisdom,  Institutional Workforce, Frontier Knowledge, and Enforcement

If a regulator is to function as a knowledge institution, its internal structure must reflect the different kinds of capability it requires. It cannot depend entirely on permanent bureaucrats, nor can it outsource its expertise to industry. It needs institutional memory, experienced judgement, continuously renewed knowledge and the operational capacity to act on its decisions.

A useful architecture would therefore contain four interconnected capabilities: an experienced governing layer, a permanent specialist core, a flexible frontier-knowledge layer and a professional regulatory-enforcement capability.

6.1 The Wisdom Layer: Board or Commission

At the apex should be a Board or Commission responsible for institutional direction and judgement. Its members should ideally bring substantial experience from the three domains most relevant to regulation: government, industry and academia.

A possible model would draw members who have recently retired from senior positions in each of these domains, subject to appropriate cooling-off periods and conflict-of-interest safeguards. Equal representation would help prevent the regulator from becoming excessively identified with any one institutional perspective. Government experience brings knowledge of public administration and policy; industry experience brings understanding of commercial and technological realities; and academic experience brings disciplinary depth and intellectual independence.

The purpose of such a Board, however, should not be to turn retired experience into the regulator's entire knowledge base. Its role is to provide institutional wisdom and judgement: to interpret evidence, balance competing public interests, determine strategic priorities, and take responsibility for major regulatory decisions.

Its authority should also remain democratically accountable. Structured parliamentary scrutiny should examine enforcement performance, staffing and technical capacity, decision-making, transparency and institutional outcomes. A strong regulator should not be an unaccountable regulator.

6.2 The Permanent Core: A Specialist Technical Workforce 

Below the Board should sit a permanent professional staff responsible for the regulator's continuing operations and institutional memory.

This layer should include specialist civil servants, technical officers, regulatory professionals, and other personnel whose expertise is relevant to the regulator's domain and is also built over time within the institution. 

Permanent transfer into regulatory institutions should be encouraged in cases of in-service government officers having relevant technical competencies, rather than treating every specialist position as another general recruitment exercise.

This is particularly important in India, where direct public recruitment—even at highly qualified levels—can involve intense competition, lengthy processes, and sometimes, controversy. A regulatory institution should not have to rebuild its technical capacity through a fresh recruitment exercise every time a specialised requirement emerges.

Permanent specialist personnel provide something that temporary experts cannot: institutional memory. They understand how standards evolved, why particular safeguards were introduced, how previous enforcement decisions were handled and where implementation repeatedly encounters difficulty.

The objective is not to create another bureaucracy. It is to create a professional institutional workforce capable of absorbing knowledge from outside while carrying out the mandate of the regulator.

6.2A Regulatory Enforcement: Authority to Act, Without Becoming a Police Force

A knowledge-intensive regulator must also possess credible enforcement capability. Rules that cannot be implemented are merely statements of intent.

The permanent operational cadre should therefore include appropriately trained regulatory officers with statutory authority to inspect, investigate, collect samples, issue notices, initiate proceedings and, where the law permits, seize or suspend regulated activities. Their work should be supported by clear procedures, technical training, digital records and appropriate accountability.

But this does not mean that regulators should become police organisations.

Regulatory officers exercise regulatory authority. Police and security forces exercise coercive powers under the criminal and public-order framework. Where a regulatory operation requires powers beyond the regulator's statutory mandate—such as physical protection, forced entry, crowd control or assistance in a criminal investigation—the regulator should be able to requisition assistance from the appropriate police or security authority under clearly defined legal procedures.

This distinction is important. A regulator should possess enough operational capability to enforce its decisions, but it should not build a parallel police force merely because enforcement sometimes requires coercive assistance.

6.3 Where Frontier Knowledge Meets Regulatory Practice: Post-Doctoral Fellowships

The third knowledge layer should be deliberately different.

Regulators should have the option of establishing post-doctoral fellowships for limited periods and in disciplines determined by their evolving requirements. These should not become permanent sanctioned posts or another route for routine government recruitment. Their strength, duration, and specialisations should be determined periodically—potentially each year—according to the regulator's current knowledge gaps.

A regulator might need fellows in materials science one year, synthetic biology or artificial intelligence the next, and environmental modelling or advanced analytics thereafter. Another regulator may require several fellows simultaneously; a smaller institution may require only one or none in a particular year. 

The purpose is to create a meeting point between the latest academic knowledge and current regulatory knowledge and practice.

The exchange should work in both directions. Researchers bring new scientific methods, technologies and findings into regulatory practice. The regulator, in turn, exposes researchers to real-world problems that academic research may not otherwise encounter: ambiguous standards, measurement difficulties, emerging risks, implementation gaps and questions that existing research has not adequately addressed.

The fellowship therefore becomes more than a temporary research position. It becomes a mechanism of knowledge circulation.

Its benefits can extend beyond the regulator itself. A doctoral graduate who spends a period inside a regulatory institution can subsequently enter industry carrying an understanding not merely of the technology but of the regulatory environment in which that technology must operate. Industry, in turn, gains access to people familiar with contemporary regulatory thinking and practice.

This creates an alternative pathway between academia, the state and industry:

University → State → Industry

rather than treating the doctorate degree as a qualification whose natural destination is academia.

The essential point is flexibility. A fellowship should remain a fellowship: temporary, purposeful, and responsive to institutional need. Its value lies precisely in allowing the regulatory system to renew its knowledge without permanently expanding its organisational structure.

6.4 Where Academic Knowledge Meets Policy Practice: Post-Doctoral Fellowships in Central Ministries

The same principle can be extended beyond regulatory institutions to central government ministries. Ministries increasingly deal with technically complex questions in areas ranging from energy, agriculture and biotechnology to electronics, artificial intelligence, climate, manufacturing and public health. Yet the permanent policy bureaucracy cannot be expected to contain frontier expertise in every emerging discipline.

Post-Doctoral Fellows can provide a flexible bridge between academic research and the practical requirements of policymaking. Their work would not be regulatory in nature. Instead, they could contribute to evidence synthesis, technology assessment, policy evaluation, programme design, emerging-technology assessment and identification of new policy questions.

The exchange would again be two-way. Fellows would bring current academic knowledge into government, while exposure to actual policy problems would give researchers a better understanding of how knowledge is translated into public action. Over time, this can generate a new form of policy expertise—neither purely academic nor purely bureaucratic, but informed by both.

The fellowship could also create another pathway into industry. A researcher who spends a defined period understanding government policy, implementation constraints and emerging regulatory directions would carry that knowledge into subsequent employment, just as a regulatory fellow would carry regulatory understanding into industry.

The broader philosophy is therefore that post-doctoral fellowships in the state should have benefits extending beyond the institutions that host them. They can become temporary knowledge bridges connecting universities, government and industry, while allowing the state to access specialised expertise without permanently expanding its organisational structure.

This is particularly relevant to a country pursuing Viksit Bharat, where policy will increasingly have to respond to technologies and industrial possibilities that did not exist when many existing administrative systems were designed.

So, together these layers can create a more balanced institution: the Board provides wisdom; permanent specialists provide institutional knowledge and operational continuity; regulatory officers provide enforcement capability; and post-doctoral fellows provide a flexible connection to frontier knowledge.

None is sufficient alone. Their interaction is what makes a regulator capable of understanding, deciding, acting and learning.

VII. The Distributed Regulatory Science Layer

A regulator cannot, and should not, attempt to house every specialist capability within its own permanent organisation. The knowledge required to regulate a complex economy is often too diverse, geographically dispersed and rapidly changing for a single institution to contain it all. This is particularly true where regulation depends upon laboratory testing, specialised measurement, field validation or advanced scientific analysis.

The answer is not to build a vast central laboratory bureaucracy. India already possesses a distributed scientific asset that can be connected to regulatory institutions: its public universities and their laboratories.

This suggests the creation of a distributed network of university-affiliated regulatory-science laboratories, formally recognised and accredited by the relevant regulator. These laboratories would constitute a distinct capability layer within the regulatory architecture—not regulators themselves, and not ordinary academic laboratories.

Their purpose would be to provide independent technical capabilities such as testing, validation, surveillance, specialised measurement, sampling analysis, technical assessment and, where required, development and refinement of testing protocols.

The scale and composition of the network should vary according to the sector. An information-technology regulator may require relatively limited distributed laboratory capacity. Electronics, pharmaceuticals, food, chemicals or advanced materials may require laboratories with highly specialised equipment spread across several regions. Physical AI could require an unusual combination of robotics, electronics, mechanical systems, artificial intelligence and safety-testing capabilities.

The principle should therefore be distributed capability according to regulatory need, rather than an arbitrary number of laboratories.

7.1 Universities as Regulatory-Science Partners

Public universities are particularly valuable because they already contain disciplinary knowledge, scientific personnel and laboratory infrastructure. A regulatory institution can therefore access capabilities that would be expensive and time-consuming to recreate within the bureaucracy.

But these laboratories should operate under a clearly defined regulatory mandate. Their standards, equipment calibration, personnel qualifications, quality systems and audit procedures should be determined or recognised by the relevant regulator. The regulator should also finance the regulatory work it commissions, including specialised equipment where necessary, laboratory personnel, consumables, calibration, maintenance and quality assurance.

This is not outsourcing regulatory authority. The laboratory produces technical evidence; the regulator exercises regulatory authority.

That distinction is fundamental. A laboratory may determine whether a food sample contains a prohibited contaminant, whether an electronic component meets a specified standard or whether a material possesses a required property. It should not decide what regulatory action should follow from that finding.

7.2 The Regulatory-Science Workforce and Its Independence

The laboratories can also create a specialised workforce around regulation. Professors may undertake defined periods of regulatory-science work, while doctoral students can work as research assistants under selected professors, contributing to testing, validation and technical research. Technical staff can develop expertise in regulatory measurement and quality systems.

Such participation should, however, come with strict institutional safeguards. A university laboratory working for a regulator should be exclusively dedicated, for the relevant period, to regulatory-science functions commissioned by that regulator. Professors, doctoral students, and technical staff participating in the regulatory assignment should not simultaneously undertake consultancy for regulated industry. The same principle should extend to consultancy for government bodies, philanthropic organisations, and advocacy/activist organisations where such engagement could compromise, or reasonably appear to compromise, the independence of their regulatory work.

This should be assignment-specific and time-bound, rather than a permanent prohibition on academic or professional engagement. Once the regulatory-science assignment ends, normal academic and professional activities can resume, subject to ordinary conflict-of-interest requirements.

The principle should also apply to personal and institutional relationships. Universities should, as far as reasonably practicable, avoid placing members of the same immediate family in laboratories serving conflicting functions within the same domain. Other close relationships that could create a material conflict should be disclosed and managed. The objective is not to regulate people's private lives, but to ensure that professional independence is not compromised—or reasonably perceived to be compromised.

The important principle is that a person generating independent regulatory evidence should not simultaneously have a professional interest in helping a regulated entity shape the outcome of that evidence.

The experience generated within these laboratories can also enrich academic teaching and research, provided confidential or commercially sensitive information is protected.

This would create an important knowledge pathway:

academic knowledge → regulatory science → regulatory evidence → regulatory decision-making → academic learning.

The laboratory network therefore does more than supply technical evidence. It creates a specialised regulatory-science workforce and a pathway through which academic knowledge can enter regulatory practice—and regulatory experience can return to academic learning.

7.3 Distributed Does Not Mean Fragmented

A distributed laboratory network must not become a collection of unrelated laboratories operating to different standards. Its strength would depend upon common protocols, accreditation, calibration, documentation, data standards and quality assurance.

The central regulator should therefore establish the framework within which participating laboratories operate, while allowing universities to develop specialised capabilities suited to regional or sectoral requirements.

This creates an architecture in which regulatory knowledge can remain centralised where consistency is essential, while regulatory scientific capability can be distributed wherever expertise and infrastructure exist.

The result is neither a centralised laboratory bureaucracy nor an uncoordinated academic network. It is a national regulatory-science capability embedded within India's existing knowledge institutions and deployable according to the needs of each sector.

VIII. The Regulator Must Follow the Entire Value Chain

Regulation often stops where production ends. A factory is inspected, a product is tested and a licence is issued, after which the product is assumed to enter a largely commercial space. That assumption becomes increasingly inadequate in a complex economy.

For many products, risk and quality can change at every stage of the transformation and distribution chain. A food product, for example, moves from agricultural inputs and primary production through processing, packaging, storage and transport before reaching an intermediary, restaurant or eatery, retailer, e-retailer and, ultimately, the consumer. Technical and safety questions can arise at any of these points.

A knowledge-intensive sectoral regulator should therefore develop expertise in the entire value chain—or, more precisely, the entire transformation chain—of the products and activities within its mandate.

This does not mean that the sectoral regulator should take over every function performed by other regulators. Competition, labour, taxation, consumer protection, data governance and other horizontal matters will continue to require their own institutions. Rather, the sectoral regulator should retain responsibility for the technical, scientific, safety and quality dimensions of the relevant product or activity wherever those dimensions arise along the chain.

8.1 Regulation Should Follow the Product

Food provides a particularly clear illustration.

A packaged food manufacturer may comply with production standards, but contamination can occur during storage or transport. A restaurant may purchase compliant ingredients but mishandle them. A retailer may sell a compliant product that has subsequently been stored improperly. An e-commerce fulfilment centre may introduce different storage or handling risks from those present at the manufacturer's premises.

The regulatory question is therefore not simply, "Is the factory compliant?"

It is: "Is the product safe and compliant throughout the chain through which it reaches the consumer?"

The same logic applies beyond food. Pharmaceuticals, chemicals, electronics, medical devices and advanced materials can all encounter technical risks after manufacturing. In some sectors, installation, maintenance, software updates, or end-use conditions may also affect safety and performance.

A regulator that understands only the point of production will consequently possess an incomplete understanding of the risk it is supposed to manage.

8.2 Intermediaries and Retailers Are Regulatory Nodes

This has an important implication for intermediaries and retailers.

Restaurants and eateries are not merely commercial intermediaries between food manufacturers and consumers. They are sites at which food is stored, prepared, transformed, and served. Retailers are not simply sales outlets when storage, handling, labelling, or product integrity can affect consumer safety. E-retailers and e-commerce fulfilment systems introduce yet another layer of distribution, with their own logistical and informational characteristics.

The same sectoral regulator should therefore retain responsibility for the relevant technical and safety aspects of these nodes. It should develop the expertise necessary to understand how the regulated product behaves at each stage.

This does not necessarily imply that every intermediary or retailer needs the same degree of scrutiny. Risk-based regulation remains essential. A large food-processing plant, a restaurant, a neighbourhood shop, and an e-commerce warehouse may require very different forms and frequencies of inspection.

But the underlying technical responsibility should remain coherent.

8.3 Sectoral and Horizontal Regulation Should Complement, Not Compete

This also helps answer a difficult institutional question: should there be a separate regulator for retailers?

Not necessarily.

Retailing is a horizontal commercial activity, while the products being retailed belong to particular technical domains. Creating separate technical regulators merely because products have entered retail could multiply institutional boundaries without improving safety.

A better architecture would allow the sectoral regulator to follow the technical characteristics of the product, while horizontal regulators address matters that cut across sectors.

Thus, a food regulator would address food safety and technical standards; a competition authority would address anti-competitive conduct; labour institutions would address employment conditions; consumer-protection institutions would address relevant consumer rights; and digital institutions would address applicable platform or data-related questions.

The objective is not to make one regulator responsible for everything. It is to ensure that no technical responsibility disappears merely because the product has crossed an institutional boundary.

8.4 The Knowledge Requirement

Following the value chain considerably increases the knowledge burden on regulators. A food regulator that understands only food chemistry but not cold-chain logistics, restaurant operations, warehousing or e-commerce fulfilment will inevitably have blind spots. An electronics regulator may need to understand not only components and manufacturing but also assembly, installation, software and end-use conditions.

This is precisely why the argument for knowledge-intensive regulation matters.

The regulator must develop, acquire or access distributed specialist knowledge corresponding to the actual transformation chain. Its own permanent specialists may provide the institutional core; post-doctoral fellows can bring frontier knowledge; and the distributed regulatory-science laboratory network can supply specialised technical evidence wherever it is required.

The architecture therefore begins to resemble the economy it regulates: specialised capabilities connected across a common system.

The ultimate principle is simple:

The regulator should follow the product, technology, or activity through the chain where its technical risks and public-interest consequences actually arise—not merely through the administrative boundaries that government has inherited.

IX. Compliance Capability: Regulation Must Also Be Usable

A regulatory system is incomplete if it knows how to enforce rules but does not help legitimate businesses understand and comply with them. This matters particularly in India, where millions of MSMEs and smaller enterprises may encounter increasingly sophisticated technical requirements without possessing the internal legal, scientific or regulatory expertise of large corporations.

The answer is not to weaken standards for smaller firms. It is to make compliance capability itself more widely available.

The recent experience of food businesses under intensified FSSAI enforcement illustrates the point. Companies have responded by commissioning internal audits, training food handlers, reviewing labels and seeking legal advice. For larger companies, these activities can be absorbed into corporate compliance budgets. For a small food manufacturer, restaurant or retailer, however, the cost of repeatedly purchasing specialised regulatory advice can become a significant barrier.

This creates an important distinction between regulatory burden and regulatory capability.

9.1 When Compliance Becomes a Private Toll Gate

There is an additional danger here. Some economists have alleged that the complexity of regulation, particularly in jurisdictions such as the European Union, has itself created a substantial industry of consultants whose business is helping enterprises navigate rules that have become difficult to understand and implement.

The precise motives behind regulatory complexity are debatable, and the existence of a compliance-consultancy industry is not, by itself, evidence of regulatory failure. Complex technologies and legitimate public-interest safeguards can require specialised expertise.

But the political-economy warning is important.

If firms must continuously purchase private expertise merely to discover what the state requires of them, access to regulatory knowledge becomes a private toll gate to lawful economic activity. Large enterprises can absorb that cost; smaller firms often cannot.

This is precisely the outcome that regulatory reform should avoid.

The objective should not be to eliminate regulatory expertise from the market. Private consultants, lawyers, and technical experts will continue to have legitimate and often valuable roles. Rather, the state should ensure that basic access to regulatory knowledge is not itself a barrier to market participation.

9.2 From Regulatory Secrecy to Regulatory Usability

A complex standard need not be an excessive burden if the regulated entity can readily understand it, test against it and correct deficiencies. Conversely, even a sensible standard can become burdensome when compliance requires navigating fragmented rules, uncertain interpretations and expensive specialist advice.

Regulators should therefore publish clear standards, standardised testing protocols, technical guidance, model documentation and predictable procedures wherever possible. Digital compliance systems should allow businesses to understand what is required, submit information efficiently and track regulatory processes transparently.

This is particularly important for emerging industries, where uncertainty is often greater than the actual technical difficulty of compliance.

A new company developing a fusion technology, an electronics manufacturer working with a new material, or a startup deploying physical AI may not know which regulatory institution will ultimately govern its activity, what evidence it will be expected to produce or which standards will apply. Regulatory clarity therefore becomes an element of industrial infrastructure.

This is where the knowledge-intensive regulator has an advantage. A regulator that understands the technology can explain not merely what must be complied with, but why the requirement exists and what evidence demonstrates compliance.

9.3 Publicly Supported Compliance Assistance

The state should go further for MSMEs.

A system of publicly funded regulatory-assistance institutions could provide testing, technical guidance, training and compliance support to smaller enterprises, particularly where the relevant requirements are highly specialised. The precise institutional form can vary by sector, but the principle should be common: a small firm should not have to purchase the entire regulatory knowledge system privately merely to participate legally in a regulated market.

Such assistance should not be provided by the regulatory-science laboratories that generate independent evidence for the regulator. The institutional firewall established earlier must remain intact.

Instead, a separate compliance-support ecosystem can be developed, potentially through universities, technical institutions, industry associations and accredited laboratories, with funding from the relevant sectoral ministry or industrial-development system.

This creates two complementary public capabilities:

Regulatory science protects the integrity of enforcement.

Compliance assistance expands the ability of enterprises to meet the rules.

Neither should be confused with the other.

The distinction also preserves a legitimate role for private consultancy. Firms that require specialised commercial advice, strategic assistance or services beyond the publicly provided compliance floor should remain free to purchase them. Public assistance should reduce the cost of basic compliance, not eliminate a private market for advanced expertise.

9.4 Compliance as Capability, Not Paperwork

The purpose of compliance assistance should also be broader than helping companies fill forms.

A genuinely useful system would help an MSME understand its regulatory obligations, establish appropriate internal processes, train workers, conduct preliminary testing, maintain documentation and identify deficiencies before an official inspection.

This changes the relationship between the regulator and the regulated entity.

Instead of:

rule → inspection → violation → penalty,

the system can increasingly provide:

rule → understanding → capability → self-check → correction → inspection.

Enforcement remains necessary. Deliberate or serious violations must have consequences. But a mature regulatory system should distinguish between enterprises that wilfully evade standards and those that are willing to comply but lack the knowledge or capacity to do so.

The distinction is especially important for MSMEs. Treating every compliance failure as evidence of bad faith can push smaller businesses towards informality rather than better compliance.

9.5 Compliance as Industrial Capability

There is also a larger economic argument.

As Indian firms enter increasingly sophisticated domestic and global value chains, regulatory compliance becomes a form of credibility capital. A company capable of demonstrating consistent quality, traceability, safety and technical conformity is more easily integrated into supply chains, export markets and relationships with larger buyers.

Compliance therefore need not be viewed merely as a cost imposed by the state. It can become part of a firm's productive capability.

This is particularly relevant to the emerging sectors discussed earlier. India's ability to develop domestic industries in ceramics, advanced materials, electronics, fusion, physical AI and other technologically complex fields will depend not only on entrepreneurs and engineers, but also on firms learning how to operate within credible standards systems.

The regulatory institution consequently has two complementary responsibilities: to prevent unacceptable risks and to help legitimate economic actors acquire the capability to operate safely within the system.

That is a very different philosophy from either regulatory permissiveness or regulatory maximalism.

A strong regulator should make compliance credible, comprehensible and achievable—while retaining the authority to act firmly when compliance is deliberately or repeatedly rejected.

X. Centre-State Twinning: National Coherence, Distributed Capacity

India's regulatory architecture has another structural complication: regulation is often divided between the Union and the States. This can be a strength, because regulation requires local knowledge and distributed enforcement. But without institutional coordination, the same division can produce duplication, conflicting interpretations and turf disputes.

The answer is not to centralise all regulatory functions. It is to connect the Union and State regulatory systems more deliberately.

A useful principle is regulatory twinning: State-level regulatory institutions dealing with a particular technical domain should be functionally paired with their corresponding central regulator. The objective would be neither hierarchical subordination nor uniform organisational design, but common regulatory intelligence, standards, professional practice and institutional language.

10.1 Functional Matching, Not Merely Administrative Matching

The first requirement is clarity of mandate.

State regulatory institutions can be broader than their Union counterparts. A State department may combine functions that are separated at the national level. Maharashtra's Food and Drug Administration, for example, covers both food and drugs, whereas food and pharmaceutical regulation operate through distinct central institutional structures.

Such arrangements may make administrative sense at the State level. But they can become problematic if a State institution does not internally distinguish the specialist functions corresponding to its different central counterparts.

Twinning should therefore occur by regulatory function, not merely by the name of an organisation.

A State food-regulatory function should be technically aligned with the national food regulator; its pharmaceutical function with the corresponding national pharmaceutical regulator; and so on. The State may retain a wider administrative institution, but its specialist divisions, technical capabilities, standards and operating procedures should map clearly onto the relevant national regulatory architecture.

This matters because an increasingly sophisticated regulated economy cannot function with fundamentally different interpretations of technical standards merely because a product has crossed a State boundary.

10.2 Distributed Enforcement, Shared Authority, and Regulatory Learning

Twinning should not create a hierarchy in which the Union regulator makes rules while State regulators merely enforce them. Where both levels possess statutory responsibility, both should possess defined inspection and enforcement authority.

The distinction should therefore be primarily one of role, scale, specialisation and coordination, rather than a rigid division of enforcement authority.

State regulators provide continuous local surveillance, routine inspections, responses to local complaints and enforcement close to the regulated enterprise. Central regulators should retain the ability to conduct their own inspections and investigations, particularly in nationally significant, technically complex, high-risk, inter-State or systemic matters.

Central regulators should also be able to undertake national surveillance programmes, compare enforcement patterns across States and intervene directly where the nature of a risk warrants it. Joint inspections or investigations should be possible where the scale or complexity of a matter requires both levels.

The broad division can therefore be expressed as:

National regulator → national standards, specialist knowledge, national regulatory intelligence, surveillance, direct inspection and enforcement, and coordination

State regulator → local intelligence, surveillance, inspection and enforcement, implementation, and rapid response

The two are complementary, not mutually exclusive.

The purpose of twinning is therefore not merely to divide enforcement work. It is to create a common professional and technical culture across the regulatory system, while allowing each level to retain its distinct operational perspective.

This arrangement has another important advantage: central inspection can become a form of live regulatory education.

A central regulator with greater technical and institutional experience can work alongside State officers during inspections and enforcement operations, demonstrating not merely what action to take but how to take it. Regulatory effectiveness is not simply a question of detecting violations. It involves judgement: when to inspect, what to examine, how to question a regulated entity, how to distinguish an innocent error from deliberate evasion, when to issue a warning, when to demand corrective action and when stronger enforcement is justified.

Professional regulation requires subtlety, discretion, maturity and procedural fairness alongside technical competence.

Central regulators can therefore help build State capacity through learning by doing, rather than relying exclusively on classroom training. In this way, regulatory twinning becomes not merely an administrative arrangement, but a mechanism for continuously raising the quality of regulatory practice across the country.

10.3 National Regulatory Intelligence, Local Regulatory Knowledge

The flow of knowledge should operate in both directions.

State regulators encounter local businesses, emerging practices, regional supply chains and new forms of non-compliance. They therefore generate granular knowledge that a central institution cannot obtain from Delhi or from laboratory data alone.

Central regulators, meanwhile, can aggregate information from across the country and identify patterns that individual States cannot see: recurring technical failures, emerging forms of regulatory evasion, unusual product risks, new technologies, regional concentrations of violations or enforcement practices that produce particularly good outcomes.

The central institution can therefore provide national inspection and enforcement intelligence to State regulators.

A properly twinned system might allow a State regulator to know that a particular product category has produced repeated violations in several other States, that a particular manufacturing process is generating a new risk, or that a particular inspection methodology has proved effective elsewhere.

State experience flows upwards.

National intelligence flows downwards.

This turns Centre–State regulation into a continuous learning system, rather than a reporting hierarchy.

10.4 Preventing Regulatory Turf Wars

This becomes particularly important when a regulated activity crosses several administrative boundaries.

Without clearly defined functional relationships, a central regulator and a State regulator may conduct overlapping inspections, issue inconsistent directions or interpret the same technical requirement differently. Businesses then face uncertainty, while regulators expend scarce capacity contesting jurisdiction.

Twinning should therefore establish clear rules for:

- division of regulatory responsibility;

- information sharing;

- direct inspection by either level within its statutory mandate;

- joint or coordinated inspections where necessary;

- escalation of technical disagreements;

- recognition of testing and certification;

- common digital records;

- training and professional standards; and

- mechanisms for resolving jurisdictional disputes.

The objective is not to prevent legitimate institutional disagreement. Independent regulatory institutions will sometimes interpret evidence differently. The objective is to ensure that disagreement is resolved through an established institutional mechanism rather than through competing exercises of authority.

Central intervention should also not automatically imply State failure. A central regulator may inspect because a matter is nationally significant, technically specialised, cross-jurisdictional or useful for national surveillance. Conversely, a State regulator should not have to wait for central intervention before acting on a local risk.

10.5 State Capacity as National Regulatory Capacity

There is also a deeper reason for strengthening this relationship.

If the Union regulator possesses excellent technical expertise but State-level enforcement remains weak, the national regulatory system remains weak. Conversely, strong State enforcement without common technical standards can produce inconsistency.

India therefore needs to stop thinking of State regulatory capacity as an administrative extension of the Union and start thinking of it as part of the country's total regulatory capability.

This has implications for investment as well. National regulators and relevant ministries could support State regulatory institutions with specialised equipment, laboratory access, training, digital infrastructure, and technical fellowships where capacity gaps are identified. State governments would retain operational responsibility, while national institutions would help ensure that technical capability does not depend entirely on the fiscal or institutional strength of an individual State.

The same principle should apply to the distributed regulatory-science laboratory network. A university laboratory serving a State regulator should be able to operate within the same national technical standards and accreditation architecture as laboratories serving the corresponding central regulator.

10.6 One Regulatory System, Many Points of Presence

The ultimate objective is neither a single regulator nor dozens of disconnected regulators.

It is one coherent regulatory system with many points of presence.

A food business in Maharashtra, a pharmaceutical manufacturer in Telangana, an electronics company in Tamil Nadu or an advanced-materials enterprise in Gujarat should encounter regulatory institutions that understand their local circumstances while speaking the same technical and procedural language as the national system.

That is what twinning should achieve.

The Union provides national coherence and specialist depth. The States provide distributed capacity and local knowledge. Universities provide distributed regulatory science. Industry and regulated enterprises provide feedback from the productive economy.

The result is a regulatory architecture that is national in standards and intelligence, distributed in capability, shared in enforcement authority, and local in execution.

XI. Strong Regulation Does Not Mean Maximum Regulation

The case for stronger regulation should not be misunderstood as a case for more regulation.

A regulator that accumulates rules indiscriminately, demands excessive documentation, intervenes in low-risk activities and subjects every enterprise to the same compliance burden is not necessarily a strong regulator. It may simply be an inefficient one.

The objective should be regulatory proportionality: the intensity of regulation should correspond to the nature, scale and potential consequences of the risk being managed.

This is where the distinction between deregulation and regulatory reform becomes particularly important. If India wants regulatory reform by conviction rather than compulsion, reform should not consist merely of removing rules because they are inconvenient. It should mean examining whether each rule is necessary, whether it addresses a genuine public-interest risk, whether it is designed efficiently and whether the institution responsible for enforcing it possesses the capability to do so.

11.1 Risk-Tiered Regulation

Not every regulated entity creates the same degree of risk.

A small enterprise selling a low-risk product should not necessarily face the same frequency of inspection, reporting requirements or procedural burden as a large enterprise whose failure could affect thousands or millions of consumers.

Regulation should therefore increasingly be risk-tiered.

Low-risk activities can operate through simpler compliance pathways, self-certification where appropriate and periodic verification. Medium-risk activities can face more structured monitoring. High-risk or systemically important activities require deeper technical scrutiny, more frequent inspection and stronger evidence requirements.

Risk tiering should not become an excuse for arbitrary classification. The criteria should be transparent, evidence-based and periodically reviewed.

The principle is straightforward:

lower risk should mean lower regulatory friction; higher risk should mean greater regulatory attention.

11.2 Outcome-Based Regulation

Regulation should also focus increasingly on outcomes rather than paperwork.

A company that has filled every prescribed form correctly but produces an unsafe product should not be regarded as a model of compliance. Conversely, a firm that has developed an innovative internal system that demonstrably achieves the required safety or quality outcome should not necessarily be disadvantaged merely because it does not resemble an old procedural template.

This does not mean abandoning rules or allowing every enterprise to define its own standards. Regulators still need clear technical requirements, testing protocols and documentation. But where possible, they should distinguish between the outcome that society requires and the particular administrative route through which that outcome is achieved.

This is especially important in emerging sectors. Physical AI, advanced materials, fusion technologies and other new industries may evolve faster than detailed rulebooks can be written. A rigid procedural system can therefore become obsolete precisely when regulatory expertise is most needed.

A knowledge-intensive regulator should be capable of recognising new methods of achieving established safety and public-interest objectives.

11.3 Regulation Must Contain Due Process

Strong enforcement also requires procedural fairness.

The recent debate around food-safety enforcement illustrates why. Regulators may need to act rapidly when there is a genuine threat to public health. But speed should not eliminate the distinction between an allegation, a preliminary finding and an established violation.

Where circumstances permit, regulated entities should have an opportunity to respond, correct deficiencies and challenge decisions through appropriate mechanisms. Public disclosure of alleged violations should follow clearly established procedures, particularly where reputational damage can occur before the facts have been fully established.

Due process is not softness.

Indeed, it strengthens enforcement by making regulatory action more credible. A regulator that follows predictable procedures is harder to dismiss as arbitrary, while a regulated enterprise knows that genuine violations will be dealt with through a system whose legitimacy it cannot easily contest.

Corrective action should therefore be an integral component of regulatory enforcement where the nature of the violation permits it. Immediate suspension or stronger action remains appropriate where risks are serious, deliberate or persistent.

11.4 The Regulator Must Be Accountable Too

Regulatory independence should not mean regulatory immunity.

A regulator exercises public power. It can impose costs, restrict activities, affect reputations and, in some circumstances, determine whether an enterprise survives. Such power requires accountability.

Structured parliamentary oversight should therefore examine regulatory performance, including:

- enforcement patterns and outcomes;

- inspection volumes and targeting;

- timelines for decisions;

- appeals and reversals;

- staffing and technical capacity;

- regulatory vacancies;

- laboratory and testing capacity;

- major changes in standards;

- complaints against regulatory conduct; and

- evidence of inconsistent enforcement.

This should not turn Parliament into a technical appeals court. Its role is institutional oversight: asking whether the regulator has the capability, procedures and accountability necessary to exercise its statutory mandate properly.

Judicial review and statutory appellate mechanisms remain equally important.

The regulator should therefore be independent enough to make technically sound decisions, but accountable enough to justify the exercise of public power.

11.5 Simplification Is Part of Strengthening

A mature regulator should periodically examine its own rulebook.

Rules can become obsolete. Different notifications can overlap. Administrative requirements can survive even after the original problem they addressed has disappeared. Multiple agencies may ask enterprises for similar information in different formats.

Such accumulation is not evidence that regulation itself is unnecessary. It is evidence that regulatory systems, like all institutions, require maintenance.

Regulatory simplification should therefore be continuous.

The regulator should periodically ask:

Is this rule still necessary?

Is it achieving its intended outcome?

Can the same objective be achieved more simply?

Is another institution already doing this?

Does the requirement impose costs disproportionate to the risk?

Can digital systems eliminate repetitive compliance?

This is the regulatory equivalent of maintaining physical infrastructure. A road is not deregulated because potholes are repaired; it is made more functional. Similarly, removing obsolete or duplicative rules does not weaken regulation. It can make the remaining rules more effective.

11.6 The Real Alternative to Deregulation Absolutism

This is ultimately where the argument returns to its starting point.

India does not have to choose between a regulatory state that suffocates enterprise and a deregulated economy in which public safeguards are progressively weakened.

There is a third possibility:

high-quality regulation.

Such regulation is proportionate rather than indiscriminate; technically informed rather than bureaucratically reflexive; outcome-oriented rather than paperwork-driven; predictable rather than arbitrary; enforceable rather than merely declaratory; and accountable rather than insulated.

The strongest regulator may therefore be the one that has fewer unnecessary rules but greater capacity to enforce the necessary ones.

That is not deregulation.

It is regulatory maturity.

XII. Regulation as a Knowledge Economy and Learning System

If regulation is fundamentally knowledge-intensive, then the regulatory institution cannot be understood simply as an administrative office that issues licences, conducts inspections and imposes penalties. It is better understood as a knowledge institution embedded within the economy.

Its knowledge must be deep enough to understand the technologies and processes it regulates, current enough to recognise changing risks and broad enough to understand how a product or activity moves through its entire transformation chain. But regulatory knowledge cannot remain confined within the regulator. It must circulate between universities, regulatory institutions, laboratories, ministries and industry, while institutional boundaries protect its independence.

This creates the possibility of something larger than regulatory capacity: a regulatory knowledge economy.

12.1 The Regulator as a Learning Institution

A regulator should not merely apply knowledge acquired when it was established. Technologies change, business models evolve, supply chains reorganise and new risks emerge.

The institution must therefore continuously learn.

This is one reason the proposed combination of experienced leadership, specialist bureaucratic expertise, post-doctoral fellowships, and distributed university-based regulatory science is important. Each contributes a different form of knowledge.

Senior members contribute accumulated institutional judgement.

Permanent specialist officials provide continuity and operational memory.

Post-doctoral fellows bring current academic knowledge and frontier research.

University laboratories provide distributed technical depth and access to specialised expertise that no single regulator could economically maintain internally.

Field inspections and enforcement generate practical knowledge. 

Industry feedback reveals how rules operate in production and commerce.

The regulator's knowledge system should therefore function as a continuous feedback loop, rather than a one-way transmission of rules.

12.2 An Alternative Pathway for Doctoral Graduates

Post-doctoral fellowships can also address a less discussed problem in India's knowledge economy.

A doctoral graduate is often presented with a narrow set of options: academia, government research laboratories, or sometimes, industry. Yet there is another domain in which advanced scientific knowledge is increasingly valuable—public regulation consultancy.

The fellow, in this case, gains practical knowledge of how regulation actually works, while the regulator gains access to current academic knowledge. A fellow may subsequently enter industry or consultancy with a sophisticated understanding of regulatory requirements; or return to academia carrying practical knowledge of regulation; or eventually compete for permanent positions within regulatory institutions through the appropriate formal recruitment mechanisms.

Thus, post-doctoral fellowships can acquire a wider public purpose. They can become temporary knowledge bridges between India's universities and the institutions that govern its economy, while creating an alternative professional pathway for highly trained researchers.

12.3 From Regulatory Knowledge to Teachable Knowledge

There is, finally, an important multiplier effect.

Knowledge generated through regulation does not have to disappear into government files.

A professor working in a regulatory-science laboratory may encounter new industrial processes, emerging contaminants, novel materials, new testing methodologies or previously unrecognised safety problems. Subject to confidentiality and intellectual-property restrictions, such experience can subsequently enrich teaching and academic research.

Similarly, researchers completing regulatory or policy fellowships carry knowledge of institutional practice back into academia. Industry professionals can, in turn, bring practical knowledge of production and technological change into the regulatory conversation.

But this circulation requires institutional boundaries.

Faculty members working in designated regulatory-science laboratories should, during their designated periods, remain separate from consultancy for regulated industry, government bodies outside the defined regulatory relationship, or advocacy/activist groups where such activity could compromise or appear to compromise their independence. The same principle should apply to doctoral assistants working under them.

This is not a judgement about the integrity of individual researchers. It is an institutional safeguard. Regulatory credibility depends not merely on actual impartiality but also on the ability to demonstrate impartiality.

The distinction between regulatory-science and regulatory-compliance ecosystems is therefore essential. A university laboratory producing independent evidence for a regulator should not simultaneously advise the firms that the same evidence may be used to regulate.

If these boundaries are maintained, a virtuous cycle can emerge:

academic knowledge → regulatory practice → operational learning → new knowledge → teaching and research → industry capability → better regulation.

Regulation thus becomes not merely a mechanism for constraining economic activity, but another institutional site where knowledge is generated, tested and circulated.

That is perhaps the deepest implication of treating regulation as a knowledge-intensive field.

A country that wants to build sophisticated industries cannot afford regulators who are perpetually learning yesterday's technologies. It needs institutions capable of learning alongside the economy they regulate.

The mature regulator is therefore not simply an enforcer of knowledge. It is a producer, curator, user and disseminator of specialised knowledge—within carefully protected institutional boundaries.

XIII. Regulatory Capability as a Pillar of Viksit Bharat

The argument for regulatory reform ultimately belongs within a larger question: what kind of institutional capabilities will a developed India require?

India's Independence Day discourse this year has placed that question in a particularly clear frame. President Murmu's I-Day eve address emphasised that the true meaning of freedom lies in enabling citizens to use opportunities, fulfil their aspirations and contribute to the nation. Prime Minister Modi's I-Day address from the Red Fort similarly placed technological capability, manufacturing, agriculture and food processing, infrastructure, defence, energy and innovation within the larger objective of Viksit Bharat by 2047.

These ambitions are inseparable from regulatory capability.

A country cannot become a sophisticated manufacturing power, a major technology producer, an advanced agricultural economy or a global supplier of high-quality products while treating regulation as an administrative afterthought. The more complex the economy becomes, the more sophisticated the institutions that govern its risks, standards and quality must become.

13.1 From Self-Reliance in Production to Self-Reliance in Institutions

Atmanirbhar Bharat is often discussed in terms of domestic manufacturing, critical technologies, energy, defence production, semiconductors and supply-chain resilience. But self-reliance has an institutional dimension as well.

India cannot become technologically self-reliant if the technical standards governing those technologies must effectively be borrowed from elsewhere. Nor can it build globally competitive industries if domestic regulatory institutions lack the expertise to evaluate their products, processes and risks.

Regulatory capability is therefore part of economic sovereignty.

This does not mean that India should isolate itself from international standards. Quite the opposite. Indian regulators should understand global standards deeply enough to adopt, adapt or exceed them where appropriate, while ensuring that Indian conditions and national interests are properly represented.

A globally integrated economy requires institutions capable of speaking the technical language of global markets.

13.2 The Youth Dimension of Regulatory Capability

The emphasis on India's young population and on expanding opportunities for young people also has a direct connection with this architecture.

India's regulatory institutions will require scientists, engineers, economists, lawyers, data specialists, inspectors, laboratory professionals, and policy researchers who understand both their disciplines and the institutions within which those disciplines are applied.

The proposed fellowship system offers one route into this ecosystem. So do assistant positions in regulatory-science laboratories, specialist technical roles within regulatory institutions, and the wider compliance and standards economy.

This creates an alternative conception of the knowledge economy.

A young researcher need not choose only between a university laboratory and a private company. There can be intermediate institutional spaces in which scientific knowledge is applied to public problems, tested against real-world conditions and subsequently carried into industry or academia.

That circulation can itself become a source of national capability.

13.3 Regulation and the Next Industrial Wave

The relevance becomes even clearer as India moves into the technological and industrial domains highlighted in the national development agenda.

Semiconductors require sophisticated standards, testing and certification.

Advanced manufacturing requires knowledge of materials, processes and industrial safety.

Food processing requires scientific oversight extending from agricultural inputs through processing, storage, restaurants and retail.

Artificial intelligence and physical AI will generate questions that cannot be answered by conventional administrative knowledge alone.

Nuclear and other advanced-energy technologies require exceptionally deep technical and safety institutions.

The same is true of pharmaceuticals, biotechnology, chemicals, aviation, telecommunications, and emerging environmental technologies.

These are not industries in which regulation can be reduced to a checklist.

They require institutions capable of understanding what the technology is becoming, not merely what it was when the regulations were written.

This is why regulatory capability should be considered part of India's industrial infrastructure alongside power, logistics, digital networks, laboratories and finance.

13.4 Reform by Conviction, Not by Compulsion

This brings us back to the idea of the Reform Express and reform by conviction rather than compulsion.

If regulatory reform is understood simply as reducing the number of rules, then institutional capability may actually deteriorate while the reform appears successful on paper.

A better test is whether reform makes the regulatory system:

- more technically capable;

- more proportionate;

- more predictable;

- more transparent;

- more accountable;

- more accessible to MSMEs;

- more responsive to technological change; and

- more effective at preventing genuine public harm.

Some rules may disappear.

Others may become simpler.

Some may become stricter because the risks have increased.

New regulatory institutions may become necessary where entirely new technologies emerge.

That is not inconsistency. It is what regulatory maturity looks like.

A developed economy cannot regulate the technologies of 2047 using the institutional assumptions of 1991—or even those of 2026.

13.5 The Institutional Meaning of Viksit Bharat

The deeper meaning of Viksit Bharat, therefore, cannot be measured only through GDP, manufacturing output, exports, patents, infrastructure, or technological achievements.

It must also be visible in the quality of the institutions that allow those achievements to become durable.

A country that manufactures advanced products but cannot independently test their quality remains institutionally dependent.

A country that produces sophisticated food and pharmaceutical products but cannot guarantee their safety compromises its own market credibility.

A country that develops powerful AI systems but lacks institutions capable of understanding their risks is technologically advanced but institutionally incomplete.

Conversely, a country with strong regulatory science, competent institutions, distributed technical capacity, credible enforcement and accessible compliance systems possesses something more durable than a collection of successful industries.

It possesses institutional capability for continuous development.

That is why regulatory reform should not be placed at the margins of the Viksit Bharat project.

It belongs within it.

India's next phase of development will demand not simply more entrepreneurs, engineers, scientists and investors, but institutions capable of making their work safe, trusted, scalable, and globally credible.

Regulatory capability is therefore not the opposite of economic freedom.

It is one of the institutional conditions that makes economic freedom durable.

XIV. Conclusion: From Deregulation to Regulatory Capability

India's regulatory debate should move beyond the binary of more regulation versus less regulation. The more useful question is whether India possesses the institutions capable of regulating a rapidly changing economy intelligently, proportionately, and credibly.

The architecture proposed here begins with recognising activities that require governance, designing sector-specific institutions around their actual risks and transformation chains, and treating regulators as knowledge institutions rather than administrative gatekeepers. It combines experienced leadership with permanent specialist capacity, flexible fellowships, distributed university-based regulatory science, accessible compliance assistance, Centre-State twinning, risk-based supervision, professional on-ground enforcement, and democratic accountability.

None of these requires regulatory maximalism. On the contrary, stronger institutional capability should make it easier to eliminate unnecessary rules, simplify procedures, and concentrate regulatory attention where genuine risks exist. The objective is fewer avoidable frictions, not fewer safeguards; greater regulatory intelligence, not greater regulatory volume.

This distinction will become increasingly important as India's economy moves into semiconductors, advanced materials, physical AI, biotechnology, sophisticated food processing, new energy technologies, and industries that may not yet exist at scale. Regulation cannot perpetually arrive after technological change. The institutions themselves must acquire the capacity to learn.

The ultimate choice, therefore, is not between the state and the market. It is between weak institutions governing increasingly sophisticated markets and capable institutions that allow those markets to develop with trust.

For Viksit Bharat, India will need the latter.

High-quality regulation is not a brake applied to development after it occurs. It is part of the institutional infrastructure through which development becomes safe, credible, scalable and durable.