A high-level committee will soon begin reviewing regulatory frameworks to improve ease of doing business in India, as announced in the Budget 2025-26.
The initiative, aimed at reducing red tape and outdated compliances, will focus on modernizing rules, licences, and permissions to create a business-friendly environment.
The committee, set up under Finance Minister Nirmala Sitharaman’s budget announcement, is expected to submit its recommendations within a year.
Finance Secretary and Economic Affairs Secretary Ajay Seth confirmed that the committee’s objective is to establish a trust-based economic governance system.
The primary focus will be on simplifying inspection procedures, cutting down on excessive compliance requirements, and ensuring that regulatory frameworks align with modern technological advancements.
Sitharaman had emphasized that states would be encouraged to participate in these reforms to foster a uniform and business-friendly regulatory environment.
The committee’s efforts are expected to lead to structural changes that will remove outdated provisions and streamline existing processes to match global best practices.
To further boost investor confidence and encourage competitive federalism, an Investment Friendliness Index will be introduced.
This index will assess states based on their business-friendly policies and investment climate, promoting healthy competition among states to attract more investors.
"Our journey towards Viksit Bharat is possible only when all stakeholders—people, regions, and states—come together to drive reforms," Seth said at the SKOCH Summit.
The index is expected to serve as a benchmark for investors to identify the most business-friendly regions, pushing state governments to adopt reforms that improve economic opportunities and ease of operations.
Alongside business reforms, the Financial Stability and Development Council (FSDC) will also focus on improving financial sector regulations.
The FSDC, chaired by the finance minister, includes key regulators such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund Regulatory and Development Authority (PFRDA).
The council will establish mechanisms to evaluate the effectiveness of existing financial regulations and ensure they remain adaptable to changing market conditions. By streamlining subsidiary regulations and enhancing financial sector efficiency, the initiative aims to support sustainable economic growth.
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