Niti Aayog CEO Advocates for Activity-Based Regulation
BVR Subrahmanyam, the CEO of Niti Aayog, issued a caution on Tuesday regarding regulatory frameworks, emphasizing that overly stringent regulations could hinder innovation. Speaking at the Global FinTech Festival 2025, he stressed the necessity for regulations to evolve from being institution-based to activity-based.
The Need for Agile Regulations
Subrahmanyam warned that if regulations become a barrier to innovation, creative solutions will emerge in more favorable environments. “We should not find ourselves in a situation where regulation obstructs innovation to such a degree that innovation shifts to other regions,” he stated, advocating for a responsive and adaptable regulatory framework.
Creating Regulatory Sandboxes
In his address, Subrahmanyam suggested that regulators should establish regulatory sandboxes to facilitate innovation. He stated, “Another critical regulatory change needed to unlock the potential of FinTech is the shift from institution-based regulation to dynamic, activity-based regulation.” This model, he argued, would help businesses innovate without unnecessary constraints.
Innovation at Scale
Subrahmanyam further articulated that innovation should be treated based on the specific products or services offered. “Why are you regulating me as a bank?” he challenged. “If I provide a banking product, regulate me as a banker, focusing on the relevant standards for that product.” This perspective emphasizes a more nuanced approach toward regulation.
Collaboration with Regulators
The Niti Aayog CEO highlighted ongoing discussions between the Ministry of Finance and regulatory bodies to implement these changes effectively. This collaboration aims to create an environment where innovation can thrive while maintaining necessary oversight.
The Role of Artificial Intelligence in Transforming Work
During his talk, Subrahmanyam touched upon the disruptive impact of artificial intelligence (AI), asserting that it presents both challenges and opportunities for the workforce. He remarked, “I don’t think the concern is about losing jobs to AI—it’s more about transitioning roles to accommodate new job types.”
Rethinking Processes with AI
Furthermore, he noted that AI has the potential to revolutionize operational processes, making them more efficient. “AI can provide a more effective approach to tasks, and it’s crucial to start re-evaluating how we employ technology in our operations,” he concluded. However, he also acknowledged that this evolution will likely result in ongoing tensions between regulators and innovative sectors.