Who said anything about effective government? If anything, your India example proves my point because they have among the most regulated and bureaucratic rules in the world, and as you say it's one of the more ineffective governments in the world.
Nobody is also arguing that there should be no rules or that companies don't deserve to be punished when they break the rules. The argument is - should an effort be made to slow down an ever expanding federal overreach? Because making up rules to put more power in the hands of bureaucrats without seeing benefits from that expansion is not a recipe for success.
The EPA has been on a tear over the last 8 years in expanding its regulatory powers outside Congressional oversight. That's not how the executive agencies are supposed to function.