The year 2025 was the year of reforms from simplification of GST, to implementation of labour reforms. The reforms unveiled this year, such as decriminalising minor offences, opening nuclear energy sector to private participation, withdrawing quality control orders for chemicals and textiles sectors, were aimed at to further ease of doing business in India.
However, whether or not the steps taken will lift animal spirits and boost business activity remains to be seen, as most of these efforts, taken through change in laws, are to yet be implemented, say experts (consultants and advisors).
In August, to usher in next-generation reforms, the Centre had constituted two high-powered groups of secretaries a and technocrats, headed by full-time NITI Aayog member and former Cabinet Secretary Rajiv Gauba. A separate committee also was created, chaired by Cabinet Secretary TV Somanathan, to work on deregulation at the state level.
"Deregulation as a theme is the switch where the regulator eases the regulation basis their experience of having seen the product or service evolve in the industry," noted Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat.
"Once the product stabilises and the regulator has a better understanding of the risks, the regulatory oversight moves from regulation to supervision. We are seeing deregulation in the financial services industry, the emerging technology space and alternate energy space, where the above principle has been applied," he added.
Key changes in 2025
The key legislations introduced by the government to enhance ease of doing business are: The Jan Vishwas Bill 2.0--which amends 17 laws, and decriminalise a range of minor offences across sectors such as municipal governance, motor vehicle regulation, and export-related activities; the new insurance bill that raises FDI in insurance sector to 100 percent from 74 percent currently; and the SHANTI bill that repeals old nuclear energy laws, and opens the highly restricted sector to private participation.
Moreover, unlike the earlier draft of Digital Personal Data Protection (DPDP) Rules, under the recent rules, notified in November, most provisions related to compliance have been relaxed for data fiduciaries -- an entity that decides the purpose and means for processing an individual's personal data, holding the primary responsibility to handle it lawfully, fairly, and transparently, say experts.
Earlier this year, the Central Board of Indirect Taxes and Customs (CBIC) tweaked several norms, such as reduced paperwork for businesses to get GST registration within 3 days. It simplified the GST regime, on recommendation of the GST Council to a three-rate structure, which will minimize complexity and curb classification disputes.
The government also introduced the much-awaited four labour codes, which have consolidated 29 erstwhile laws. In an interview with Moneycontrol recently, Labour Secretary Vandana Gurnani had said that the number of registers that companies need to maintain now have come down from 84 to eight, and 87 criminal offences are reduced to 22, of which 16 are compoundable.
Financial sector deregulation
Meanwhile, the financial sector regulators have also streamlined several rules to reduce compliance burden on the BFSI sector. For instance, the Reserve Bank of India on November 28, scrapped over 9,000 circulars and consolidated rules into 244 Master Directions across 11 types of regulated entities (including commercial banks, payments banks, NBFCs, etc.)
In a statement, the central bank had noted that the consolidation exercise marks a "paradigm shift" in regulatory communication, aimed at the "broader objective of ease of doing business".
The Securities and Exchange Board of India (SEBI) too has unveiled measures aimed at simplifying compliance for related party transactions (RPT)--a deal or arrangement between two parties who are joined by a pre-existing business relationship or common interest.
In October, SEBI issued a circular relaxing the minimum information requirements for listed companies seeking approval for RPTs from their audit committees and shareholders. Under the revised framework, companies need to provide simplified disclosures if the transaction does not exceed 1 percent of annual consolidated turnover or Rs 10 crore, whichever is lower. Transactions below Rs 1 crore are exempted from the minimum information requirement altogether.
This week, SEBI’s board is scheduled to meet, and likely to review mutual fund regulations, stockbroker regulations, and the ‘Issue of Capital and Disclosure Requirements’ (ICDR) framework to improve ease of doing business and boost retail investor participation, according to sources. The board may also discuss revamping the conflict-of-interest code for SEBI whole-time members and officials.
"While deregulating, the focus needs to be on keeping things steady while encouraging growth, making sure all the regulators talk to each other, beefing up cyber security, and getting more people into the financial system," said Ramesh K. Vaidyanathan, Managing Partner at BTG Advaya – a Delhi based law firm, specializing in dispute resolution, policy and advocacy, and data privacy.
"It’s important that private and government players get a fair shot too. For instance, there’s a lot of overlap between how SEBI and IRDAI regulate similar fund products, so that should be sorted out to avoid confusion," added Vaidyanathan.
What’s in store for 2026?
Going forward, the most significant changes, with the objective of reducing compliance, are likely to be witnessed with respect to the recommendations made by a Niti Aayog panel, headed by former Cabinet Secretary Rajiv Gauba, on non-financial regulatory reforms.
According to sources, the panel has suggested scrapping the mandatory CSR (Corporate Social Responsibility) requirement for MSMEs, simplifying GST return filing, and raising the threshold for a definition of a “small company” to more than Rs 100 crore.
It has recommended reducing mandatory board meetings and audit burdens for smaller firms, cutting penal interest on delayed GST payments from 18% to 12%, and reducing documentation for new business registrations.
Moreover, the panel has suggested that there shall be a fixed calendar for regulatory updates, that is, amendments shall be introduced on a fixed date every year unless deemed necessary for compelling reasons. And on quality control orders, it has recommended deferring the implementation of upcoming QCOs and cross-sector technical standards (OTRs) for raw materials and capital goods.
Experts say labour codes have finally moved ahead, but the government also needs to make land and environment clearances simpler, especially for infrastructure and industry. “MSMEs need a lighter compliance load, and it’s high time we reformed warehousing, logistics, and building by-laws," said Vaidyanathan.
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