Union Budget 2025-26: Government Proposes Comprehensive Regulatory Reforms for Ease of Doing Business

New Delhi: Union Finance and Corporate Affairs Minister Nirmala Sitharaman presented the Union Budget 2025-26 in Parliament today, outlining a series of regulatory reforms aimed at fostering innovation, economic growth, and employment generation. The reforms are designed to modernize India’s regulatory framework, ensuring that regulations keep pace with technological advancements and global policy trends.

A Modern, Trust-Based Regulatory Framework

In her speech, Sitharaman emphasized the government’s commitment to creating a flexible, people-friendly, and trust-based regulatory framework that would be appropriate for the twenty-first century. She highlighted the importance of ensuring that regulations are not only updated but are also conducive to unleashing productivity and boosting employment across sectors.

Key Measures for Regulatory Reforms

To implement these goals, the Finance Minister proposed four specific initiatives:

1. High-Level Committee for Regulatory Reforms
   A High-Level Committee for Regulatory Reforms will be established to review all non-financial sector regulations, including certifications, licenses, and permissions. This committee will work to make recommendations within a year, with the aim of enhancing ease of doing business by simplifying compliance processes and minimizing unnecessary inspections. The committee will also encourage states to participate in this reform initiative.
2. Investment Friendliness Index of States
   To further strengthen competitive cooperative federalism, the Finance Minister proposed the launch of an Investment Friendliness Index in 2025. This index will assess how conducive each state is to attracting investment, based on factors such as regulatory processes, ease of setting up businesses, and investor support.
3. FSDC Mechanism for Financial Regulations
   A new mechanism under the Financial Stability and Development Council (FSDC) will be set up to evaluate the impact of current financial regulations and subsidiary instructions. This mechanism will also help formulate a framework for making the financial sector more responsive to market needs and developmental challenges.
4. Jan Vishwas Bill 2.0
   To further reduce the regulatory burden on businesses, the government will introduce Jan Vishwas Bill 2.0, which will decriminalize over 100 provisions in various laws. This builds on the success of Jan Vishwas Act 2023, which decriminalized more than 180 legal provisions. The new bill aims to reduce unnecessary penalties and provide businesses with a more conducive regulatory environment.

Commitment to ‘Ease of Doing Business’

The Finance Minister reiterated that in the last decade, the government has consistently demonstrated its commitment to the ‘Ease of Doing Business’ agenda by implementing several reforms in both the financial and non-financial sectors. She stressed that the new initiatives would further simplify business operations, improve investor confidence, and promote a more transparent regulatory environment.

Conclusion: A Vision for the Future

These proposed reforms reflect the government’s broader vision for a dynamic and investor-friendly regulatory environment, which will support India’s economic ambitions and foster job creation. By aligning regulations with the demands of a fast-evolving global economy, the government aims to boost India’s competitiveness on the world stage, contributing to the goal of a Viksit Bharat (Developed India).

The Budget’s focus on regulatory reform signals a forward-thinking approach that recognizes the need for an agile, transparent, and responsive governance framework to drive sustainable growth in the years to come.