India's New Rulebook Aims to Test Regulations Before They Bite

India's Department for Promotion of Industry and Internal Trade released a Regulatory Impact Assessment guidebook for Union ministries last week, drawing on a toolkit developed by the consumer advocacy group CUTS International. The manual is meant to give policymakers a systematic way to weigh the costs and unintended consequences of proposed rules before they take effect, according to CUTS Secretary General Pradeep S. Mehta and senior research associate Pooja Sharma, who wrote about the guidebook in a Mint op-ed.

Prime Minister Narendra Modi has been pushing deregulation as part of the Viksit Bharat-by-2047 goal. In late June he met with Union secretaries and may hold a similar session with state chief secretaries soon. The RIA guidebook is the latest step in that direction, though its adoption across ministries remains voluntary.

Mehta and Sharma said India has historically drafted ambiguous regulations first, evaluated the impact later, and then carried out corrective measures. That sequence often creates problems that are hard to undo, they said.

A case in point is the ban on online gaming platforms introduced last year. The government said it aimed to protect consumers from illegal betting and curb money laundering. The ban pushed users to offshore and unregulated platforms, the authors wrote, and the daily user rate actually increased. That made the problem harder to address.

Other sectors have seen similar outcomes. Regulations intended to solve one problem can create compliance costs, administrative burdens, discourage innovation, distort markets, or push activities into informal spaces, the authors said. Smaller enterprises tend to bear the brunt.

CUTS called the RIA a diagnostic tool for policymaking, comparable to a medical diagnosis before treatment. The guidebook reverses the traditional sequence: assess before enact, not after. The authors also noted that even simple typos like "and" instead of "or" in a legal text can produce wild outcomes, making proper legal scrubbing essential.

International practice supports the approach. The World Bank's Global Regulatory Practices data shows more than 80 jurisdictions have institutionalized RIA as part of their governance frameworks. The authors pointed to the United States, where the cumulative cost of conducting 15 RIAs was $10 million. For three of those 15 studies the net benefit generated exceeded that amount.