Speaking on "Challenges in the new millennium" at the Indian Merchants' Chamber in Mumbai, Ambani said, "Government intervention, subsidies and heavy-handed regulation are not capable of achieving - what millions of young entrepreneurs can achieve - when set free."

"Economic activity was never a part of the statecraft in the country, except in the post-independence years. Whenever the Government sought to exercise control on economic activities, it only resulted in stifling private initiatives and creating roadblocks on economic development.

"The philosophy of the state's withdrawal from economic activities is in keeping with and not in contradiction with our tradition," Ambani reminded the packed auditorium.

He was addressing a felicitation ceremony organised by IMC to honour eminent jurist Nani Palkhivala, industrialist SP Godrej and HDFC chairman Deepak Parekh for outstanding contributions in their respective fields.

Stressing on the need to de-bureaucratise, Ambani told the gathering that the time has come for governance and managing processes to be radically overhauled. "We have to be free from a system that places bureaucracy on a high pedestal and denigrates entrepreneurship. We must radically overhaul all government processes so that it rewards performance and punishes non-performance," Ambani said.

Underlining the need to reform labour laws, he said that the present legislation was, on the contrary, blocking creation of large-scale employment opportunities.

"Existing labour laws in India protect 28 million jobs in the organised and government sectors at the cost of creating 350 million new jobs. We need a labour policy that is an employment creation policy and not an employment protection policy," Ambani said.

"India needs bold and radical initiatives, not incremental steps. There is a general tendency to cling to existing customs because the weak and meek are afraid of the unknown. There is an urgent need to bring about a paradigm shift in our attitude, governance, and above all, our governing and managing processes. Infrastructure development, privatisation, labour reforms, legal and judicial reforms, national technology missions, electoral reforms, downsizing of government - are all crying for radical solutions, not creeping change," Ambani said.

In his acceptance speech, Parekh said the biggest challenge for India was to put in place a good governance, not only at the corporate but also at the political level.

Commenting on the political instability in the country, outgoing IMC president YP Trivedi said that the positive signals through a pro-growth budget and pro-export exim policy are less likely to have the expected impact on the economy. "Now, more than ever in the past, the need has arisen for political parties to evolve a minimum economic agenda irrespective of ideological nuances," Trivedi said.