Industries Hurt by Regulation

I was talking with a friend the other day of how the government is starting to hurt industries through arbitrary regulation and policies.

I was myself witness to what happened to the SMS business with the TRAI regulations that came in last year. Other than that, the telecom industry is hurting. So is the microfinance industry. The gold finance companies too have been severely impacted by the spate of regulations brought forth by RBI. And there are perhaps some others.

On top of this, the Finance Minister is still intent on bringing forth those retrospective taxation laws.That has the potential to hurt many companies.

I don’t remember the period just before 1991 much since I was in the US then, but I can only imagine how it must have felt. Unfortunately, we don’t have elections for another couple years.

2 thoughts on “Industries Hurt by Regulation

  1. Hello Rajesh
    I have had the privilege of working with both MFI and SMS industry when these regulations were placed on them. In some sense I had a ring side view of things going wrong in the MFI industry. I think that government has indeed put more stringent rules than necessary on both these industries. However, I still fail to understand as to why leaders in this industry could not take corrective measure proactively ?

    In MFI industry everybody at that time knew that the pace of growth is unsustainable and pipelining of loans is something which was widely known. Similarly in SMS industry everybody knew that proverbial shit is going to the fan. Yet everybody just concentrated on blasting most number of SMSes till the going is good without any regard to spam, ethics,
    conversion rates etc.

    I don’t think we can really blame the government.