Too many regulatory guardrails could impede growth rate: Uday Kotak

New Delhi, Veteran banker Uday Kotak on Tuesday said that too much regulatory guardrails could impede economic growth and halt India's journey towards a developed nation. Regulators should not be too conservative and cautious but must respond fast to "accidents" in the respective sectors, he said while addressing a two-day event organised by National Financial Reporting Authority (NFRA).

"I feel very very optimistic for India's future but I am also very conscious that...unbridled focus on the opportunity without having the guardrails also runs the risk, and also too much guardrails will not get us there (developed nation)," he said.

Observing that the aspiration of the fast growth of 7.5-8 per cent GDP over the next 20-25 years needs significant capacity building, he said, "it also requires a sense of dreaming. It requires a sense of creativity, entrepreneurship, and professionals (need to be) ready to take risks without fear."

If the Indian economy has to transform, he said, "we need to protect and nurture our entrepreneurial and creative spirits very much for India to achieve its ambitions and aspirations."

At the same time, he added there is a need for significant capacity building to manage this transition and transformation in the system.

In a fast developing economy, he said, risk would emerge but halting growth is not a solution, rather it has to be dealt with alacrity.

Citing an example, Kotak said, "we must encourage a lot more traffic, a lot more roads, have better signals, better regulation and most importantly fast resolution mechanism should an accident happen."

The country, he said, should have a good regulation to prevent accidents.

He also said that India has transformed from being a nation of savers to investors with more and more people parking their surplus funds in mutual funds and equity markets.