Ease of doing business gets fresh impetus

The Budget 2025-26 prioritises EoDB initiatives, advocating for a light-touch regulatory framework rooted in principles of trust and efficiency.
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Over the past decade, the government has consistently demonstrated its commitment to improving the Ease of Doing Business (EoDB) in India by rationalising regulatory burdens and promoting a more business-friendly environment.

The government’s efforts in the past have already led to the rationalisation of over 40,000 compliances at the pan-India level, significantly reducing the bureaucratic hurdles faced by industry. This commitment was once again reinforced in the Economic Survey 2024-25 and the Union Budget 2025-26, which continued to emphasize deregulation as a central pillar of economic policy, ensuring that businesses operate within a modern, flexible and trust-based regulatory environment.

The Budget 2025-26 prioritises EoDB initiatives, advocating for a light-touch regulatory framework rooted in principles of trust and efficiency. The primary goal is to develop a regulatory ecosystem that is modern, people-friendly and supportive of entrepreneurial ventures. In this regard, a major structural reform introduced in the budget is the establishment of a high-level committee to undertake a comprehensive review of non-financial sector regulations, certifications, licenses and permissions. This committee will play a pivotal role in identification of regulatory compliances, whose resolution will reinforce trust-based economic governance.

To promote competitive federalism among states, the budget has introduced an investment-friendly index that ranks states based on key business parameters. The index shall help to streamline regulatory processes at the state level, creating a business-friendly atmosphere across India.

Further, building up on Jan Vishwas Act 2023, which decriminalised over 180 minor provisions, the budget has announced the introduction of Jan Vishwas 2.0, aiming to decriminalise over 100 provisions that hinder business operations. This marks a significant step toward reduction of legal uncertainties for entrepreneurs and promoting a more conducive business climate.

Towards rationalisation of processes, the budget has announced reform measures in a range of areas. It has introduced a two-year time limit for finalising provisional assessments under the Customs Act, 1962. This, with the possibility of a one-year extension, will enhance trade facilitation parameters and improve predictability in customs procedures.

Similarly, in the realm of taxation, the budget has announced streamlining of transfer pricing mechanism. The new scheme allows for the determination of the arm’s length price of international transactions for a block period of three years. Also, in line with the recommendation of CII, the scope of safe harbour rules has been expanded, which will help in reducing litigation and enhancing certainty.

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