In most parts of the economic policy debate in India, the people are deeply cynical about the motives and the competence of government, and deregulation is viewed as a good thing. The transformation of India - going from 3.5% growth in 1979 to 7.5% growth in 2007 - was critically about getting government out of a deep engagement with the economy. But in finance, there is not - as yet - a widespread appreciation of the difficulties of the license-permit raj that is in operation (though Jamal Mecklai gets it). Regulation is uncritically viewed as a good thing; audiences applaud when more restrictions and more controls are announced.
Part of the problem, of course, is that regulated firms are afraid of criticising regulators. Another part of the problem is that domestic lawyers & accountants are beneficiaries of the existing FII framework and would not be happy if India moved forward to ending the FII framework.
Amongst the sensible material that has come out is this debate between K. N. Vaidyanathan, Susan Thomas and Rashesh Shah in ET; an editorial in Indian Express; and this article in ET by Shishir Prasad.