Regulator should not stand in the way of innovations, CEA Anantha Nageswaran on crypto, online gaming and more

Chief Economic Advisor (CEA) V. Anantha Nageswaran has called for greater self-accountability among regulators, urging them to strike a balance between fostering innovation and addressing social costs. Speaking at the 2024 Global Economic Policy Forum, organised by the Ministry of Finance and Confederation of Indian Industry (CII), Nageswaran emphasised the importance of regulatory transparency and responsibility in sectors like cryptocurrency, online gaming, and emerging technologies.

“In India, where there is extensive financial illiteracy, regulators need to distinguish between not standing in the way of moonshots and identifying sectors where we need to be more conscious of social costs and benefits, whether it is crypto, bitcoins, or online gaming,” Nageswaran said.

He underscored the importance of defining clear criteria for regulators to avoid stifling innovation while ensuring that economic activities align with societal goals.

Nageswaran highlighted that regulators should adhere to the same principles of transparency and accountability expected from the entities they oversee.

“The same principle of transparency and social cost benefits that we want to apply to regulated entities and some of their financial innovations should also apply to the regulators themselves,” he said, stressing the need for regulators to actively share information and evaluate their own actions.

He also pointed out the distinction between elected and unelected powers, noting that unelected regulatory bodies are inherently less accountable. “Unelected powers are not held as accountable as elected powers, so they must impose it upon themselves,” he added.