To truly transform governance, reforms must ask 'why' certain rules exist

As India enters the next phase of governance reforms, the key question is what they should target to go beyond past achievements. Over the last decade, more than 40,000 ease-of-doing-business measures — from the Single Window Interface and e-Sanchit to faster insolvency resolution and online tax filing — have significantly reduced time, costs, and procedural complexity. Yet a contrasting picture emerges. With 9,420 new compliances added in 2023 alone (TeamLease), further reforms are needed to create a truly globally competitive and efficient business environment. 

Why do new compliance requirements keep emerging despite efforts to reduce them? A key reason lies in the inherent tension within governance: Bureaucracies naturally favour continuity over change and control over deregulation. The common reflex —“The rules do not permit it”— often overlooks the fact that laws exist to serve society. Laws are meant for people, not people for laws. As technology advances and global competition intensifies, continuous review of rules becomes essential. Nations that reimagine procedures and embrace innovation emerge more efficient and competitive. 

A more fundamental explanation lies in the purpose of reforms. They fall into three categories, depending on the question they address: “Why” a rule exists, “How” it is implemented, and “What” it actually means. Most reforms focus on execution (how) or compliance (what), rarely questioning the rule’s underlying purpose (why). Without understanding why a rule exists — what public good it serves — changes remain superficial and incremental. Probing purpose is central, as formalised in Toyota’s founder Sakichi Toyoda’s “Five Whys” method, which identifies systemic flaws rather than surface symptoms, enabling lasting, meaningful reform. 

Consider a rule criticised by entrepreneurs: Multiple government approvals to start a business. Using the Five Whys: (i) Why are so many approvals required? To ensure businesses meet safety, environmental, labour, and financial norms before starting. (ii) Why not check compliances after the business begins? Fear that businesses might misuse the system or violate rules if allowed to self-certify. (iii) Why is there such distrust in businesses? Historically, under colonial and socialist systems, enterprises were seen as exploitative. (iv) Why has this distrust persisted? Because the colonial legacy has never been fundamentally questioned. (v) Why not adopt trust-based self-certification with penalties for violations? It would require a structural shift — from pre-approval controls (process approach) to accountability afterwards (outcome approach). 

Reforms that focus only on How or What yield very different results. A How-focused reform — moving approvals online, reducing timelines, or integrating single-window portals —improves efficiency but leaves the “approval raj” intact. A What-focused reform — simplifying forms, removing duplicates, or reducing licences — reduces burden but preserves the underlying assumption that government permission is always required.  

Asking why is a powerful tool for meaningful reform. It sparks critical thinking and challenges outdated assumptions. One assumption that needs rethinking is distrust within governance. A government of the people, by the people, and for the people must discard this mindset. When rules exist merely because “someone might cheat,” the Pareto principle applies: Most people are honest, and the cost of elaborate distrust-driven controls often outweighs losses from cheating. Shifting to a trust-and-accountability approach has a collateral benefit. It reduces unnecessary procedures, simplifies governance, lowers administrative burden, and creates a system that is both efficient and fair. 

Another outdated notion is that national interests are best served only by the public sector and that public funds are its exclusive domain. Any collaboration with the private sector is viewed with suspicion.  A corollary is keeping strategic sectors under government control in the name of national safety. I would differ: Patriotism and nationalism are defined by commitment and action, not by employer. Recent experience shows India’s private sector playing a decisive role in defence, space, and cybersecurity — fields once considered too sensitive for non-government participation.  

National responsibility belongs to all. The private sector brings innovation, energy, and scale, while the public sector represents only a fraction of national capacity. Since the private sector is profit-driven, policies engaging it must be outcome-oriented, complementing the process-driven public sector. However, the private sector generates wealth, drives growth, and strengthens national resilience. Leveraging both sectors is no longer optional — it is essential. 

Digital technologies and social media have transformed how information is accessed, stored, and processed. Paper-based practices — like requiring physical affidavits  — are no longer necessary. Modern systems such as Aadhaar, DigiLocker, and real-time online databases enable instant, secure validation, moving beyond merely automating old processes to rethinking how governance works in a digital era. 

Equally outdated is the belief that secrecy and rigid information silos are essential. As a result, information that could be public is often withheld, with “confidentiality” used to hide mistakes and inefficiencies. In the digital age, secrecy is untenable: Even small data fragments can be crowdsourced, and open-source intelligence exposes the limits of tight control. Governance built on secrecy is not just inefficient, it is obsolete. True reform requires transparency and technology-enabled efficiency. This is also essential to leverage the huge potential of data economy.  

As India steps into Reform 2.0, the focus must shift to asking why rules exist while setting the reform agenda. Prime Minister Narendra Modi’s vision of “Reform, Perform, Transform,” “Minimum Government, Maximum Governance,” and “Digital India” provides the foundation. By challenging outdated assumptions and probing the purpose behind rules, India can move beyond incremental changes to create an efficient, future-ready governance system. 

 

The author is chairman, UPSC, and  former defence secretary. The views are personal