Chakravyuha refers to Indian economy and policy making. In this firms can enter with ease but cant exit due to legislations, political compulsions. The market economy requires unrestricted entry for new ideas, firms so that resources can be allocated to efficient uses and at the same time exit should also be allowed so that resources can be taken away from inefficient firms.
India has moved from socialism with restricted entry to marketism without exit.
Problem of exit in India is demonstrated from the fact that the most successful plants are only 1.5 times larger than newer plants. This number is worrying as the most successful plants would have competed longer and dominated their peers and gained a market share. In the US this is 40 times and in Mexico 2 times.
Also there are many sick and inefficient firms in India that should not survive are run due to more number of employees in them.
Cost of impeded exit:
Improving policy making by enabling public servants to decide freely and without fear: