Weak regulation hurt public policy in 2025; fixing it is 2026's big task

From aviation to finance, regulatory failures marked India's economy in 2025, exposing weak state capacity and the urgent need to redesign how regulators function

What happened in the Indian economy in 2025? A series of problems that surfaced — from civil aviation to public health — were linked to regulation. The Indian state has developed a potent regulatory arm, with interventions all across the economy carried out by “statutory regulatory authorities” (SRAs). But SRAs have inherited the sources of Indian state failure: Too much central planning, too little rule of law, and low state capability. This has turned into a major bottleneck for the possibility of exuberant private investment. What is required is not tinkering with the output of SRAs — one