Without any forewarning or reaction time, the quickly changing new global economic order has plunged us into a state of shock and uncertainty. While technological obstacles were already causing problems, the collapse of local and global economies as a result of the pandemic necessitates the creation of procedures and structures that permit the reconstruction and rejuvenation of economies. Every economy must adapt to the situation and establish measures to ensure that its economic laws and development needs are in sync.
Every piece of legislation has a rationale and a history, as well as distinct goals and provisions. All laws, especially economic laws, must adapt and keep up with changing circumstances in order to meet the dynamic environment. With recent changes in economic characteristics, updating laws to reflect these changes has become increasingly challenging. Whether it’s corporate tax regulations, banking legislation, GST or VAT laws, the task has become more difficult. Large growing economies such as India, China, and Brazil, as well as developed economies such as the United States, the United Kingdom, and Australia, are all being pushed to reform.
There needs to be a more concerted attempt to respond in real time. China and India are likely to be more aware of the situation. While China’s logistical assistance for reacting in real time is more advanced, India’s government is also well aware of the obstacles posed by archaic economic regulations. In the last few years, India has risen dramatically in the ease of doing business rankings (from over 150 to 63). Economies in varying stages of development, particularly those in emerging markets, must always evolve.
Over 6,000 studies (in the context of several economies, including India) have been conducted in the last two decades to determine the impact of economic regulations and business rules on growth, productivity, employment, and trade. The study of the Debt Recovery Tribunals in India and their positive impact (Visaria, 2012), the reduction in complexity of the tax system by 10% has the effect of a 1% reduction in tax (Lawless, 2013), and economies with good business environments grow faster (Djankov, etc, 2006) are just a few of the findings and correlations. Economic regulations that affect the corporate regulatory environment, according to these research, have played a critical and positive influence in development and growth.
Any country’s logistical and legal framework for regulating economic resources must be in place to ensure that they are used efficiently and fairly. Formal economic rules have evolved over time in different parts of the world, depending on the problems, environment, and goals. The digital economy is now posing a threat to income, and market valuation and market share are becoming increasingly important.
Even affluent countries such as the United States, the United Kingdom, Italy, and Australia are adapting to the changing global economic landscape. Top political and economic challenges include economic barriers, taxation sharing, and tariff issues. A crucial role is played by logistical transformation, political resolve, and administrative savvy.
It’s nearly hard to keep economic laws up to date in real time. However, there are several crucial issues to be addressed, such as (i) the variety of industries has risen dramatically in the last 20 years. (ii) In recent years, India’s economic activities have had a bigger impact and association with global markets and economies. (iii) Old and out-of-date economic legislation must be eliminated. (iv) A logistical infrastructure for the equitable implementation of laws must be in place. (v) Laws must be framed and amended on a regular basis based on honest and dynamic feedback from knowledgeable and well-intentioned institutions and individuals. (vi) To ensure justice and dynamism, a synergy with international institutions and significant economic powers must be maintained.
The canvas is large, and issues are constantly being added and updated. In terms of its size, population, diversity, natural resources, human capital, and global market, India’s economic development narrative is unlike any other. Several Indian economic laws, such as those governing taxation, banking, foreign exchange regulation, gold control, drugs, consumer protection, customs, and GST, are obviously and directly linked to economic regulation and resource raising.
Economic regulations can be fewer and simpler in countries with a smaller diversity of economic activity. In India, dealing with the enormous and complicated nature of economic operations remains a difficulty. To keep firms motivated, how rigorous should banking and corporate laws be? Frauds, on the other hand, must be investigated.
Changes to the Companies Act (2013-2019), Income Tax Act (1961-2020), GST (since 2016), The FEMA (1999-2019) or Money Laundering Act (2002 onwards), The Benami Transactions Act (1988-2018), Banking Laws (1949-2020), and Debt Recovery Laws (2016) are all significant steps taken by the state to improve the economy. Due to their variety, economic laws must also focus on rising digital footprints, social media, and the informal sector, as well as MSME’s.
These economic law reforms have received widespread acclaim. However, a more detailed and precise analysis and study may be necessary to consider a more objective appraisal of the quick changes. Addressing reforms and evolution based on changing business and economic structures, as well as ground level and technology-driven changes, must be a continuous process in order to ensure that economic laws in any country, including India, play a strong beneficial role in the long run.