Regulatory Simplification and Financial Inclusion in India's Sustainable Entrepreneurship Agenda

Parveen Shukla
DOI: http://dx.doi.org/10.19085/sijmd120401

Abstract

India's regulatory architecture has long been seen as both a shield and a stumbling block for entrepreneurial activity. This paper examines the relationship between regulatory simplification and financial inclusion within the context of India's sustainable entrepreneurship agenda. Drawing on institutional theory and market-imperfection frameworks, the paper argues that unnecessary regulatory complexity functions as a structural barrier that keeps marginalised entrepreneurs, particularly those operating micro and small enterprises, from accessing formal financial services. It also argues that reforms which trim this complexity, without dismantling necessary oversight, can widen financial access and, in doing so, support a more socially and environmentally responsible entrepreneurial ecosystem. The paper reviews the evolution of India's regulatory landscape since 2014, with attention to key reforms such as the Insolvency and Bankruptcy Code, the Pradhan Mantri MUDRA Yojana, and the Pradhan Mantri Jan Dhan Yojana. It situates these reforms within the broader sustainable entrepreneurship literature, and identifies the conditions under which regulatory simplification actually reaches the entrepreneurs who need it most. The paper concludes that while reform has progressed, implementation gaps and entrenched information asymmetries continue to limit the full effect of these changes on ground-level financial inclusion.

Keywords

Regulatory simplification, financial inclusion, sustainable entrepreneurship, India, institutional theory, MSME, informal sector

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