Despite efforts to deregulate, Indian businesses continue to grapple with a complex web of requirements, raising calls for further reform to streamline approvals and reduce costs, particularly for smaller firms.
A parliamentary standing committee has highlighted a familiar problem in India’s reform story: businesses are still carrying a heavy compliance load even after years of deregulation. In a report tabled in Parliament, the committee said the government’s Reducing Compliance Burden initiative has cut, simplified, digitised or decriminalised more than 47,000 requirements. But stakeholders told the panel that a typical firm still has to contend with 1,536 Acts, 69,233 compliance obligations and 6,618 statutory filings across central, state and local authorities.
That scale matters because, as the committee’s findings suggest, trimming individual rules does not automatically make life easier for companies. The real test is whether a business can secure approvals without moving between multiple departments, provide information once rather than repeatedly and receive decisions within a predictable time frame. On those measures, the reform effort is clearly unfinished.
The broader concern is that regulatory overlap continues to raise the cost of doing business, particularly for smaller firms with limited legal and administrative capacity. Recent industry commentary on India’s digital and tax compliance regime points to a similar pressure point: businesses often face not just the direct expense of meeting rules but the indirect cost of designing systems, maintaining records and staffing compliance functions. Survey evidence cited by The Economic Times also suggests that high compliance burdens remain a drag on manufacturing growth, alongside weak access to capital.
That makes the next phase of reform more demanding than the first. Reducing the number of provisions on the books is useful, but it is no substitute for a system that is simpler, more coherent and easier to navigate in practice. If the government wants to improve ease of doing business in a meaningful way, it will need to focus less on headline counts and more on whether regulation is actually becoming faster, clearer and more predictable for firms.
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