OECD Urges Digital, Risk-Based Reforms To Boost Growth And Regulatory Quality
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure
Institutions: Ministry of Commerce and Industry | Department for Promotion of Industry and Internal Trade (DPIIT)
The Organisation for Economic Co-operation and Development (OECD) released a new report, Licensing and Permitting: How to Manage Risks While Supporting Growth, offering six core principles for regulatory reform. The report tackles the critical governance challenge posed by complex licenses and permits (L&P), noting that overly burdensome, slow, or unclear procedures can stifle economic growth and innovation while failing to effectively protect public interests.
The goal is to ensure licenses, which are meant to protect people and the environment by requiring approval for risky activities are granted quickly and efficiently. The core recommendation is to apply a risk-based and outcomes-focused approach, meaning the government should only use licenses where they are genuinely necessary and focus on the final results (like safety or environmental protection) rather than simply bureaucratic process. This modern approach helps restore public trust and makes sure rules support economic growth.
The six core tenets include adopting:
A risk-based and outcomes-focused approach to ensure the regulatory burden is proportionate to the risk being managed.
Digitalization and βOne-Stop Shopsβ to streamline applications and approvals through single access points.
Transparency and Fairness to restore public trust by making rules clear, accessible, and subject to fair appeal processes.
Early and Continuous Stakeholder Engagement with industry and the public during the design and review phase.
Ex-post Review and Improvement to regularly check if L&P systems are still effective and support competition, rather than becoming outdated obstacles.
This international report provides a direct blueprint for Indiaβs ongoing regulatory reforms under the Ease of Doing Business mandate, showing how central and state governments can streamline their processes to attract investment without compromising core regulatory goals.
What is a Risk-Based Approach to Licensing?β A risk-based approach to licensing means that the government only enforces the heaviest and slowest approval processes (licenses and permits) on activities that pose a genuine threat to public safety, health, or the environment. For low-risk activities, the government might use lighter regulations, like simple registration or notification. This method prevents unnecessary delays for most businesses while ensuring high-risk sectors remain properly controlled.
Follow the full report here: https://www.oecd.org/en/publications/licensing-and-permitting_68fc3301-en.html