Ease of Doing Business: Deregulation Becomes the Theme for Union Budget 2025

Finance minister Nirmala Sitharaman has announced setting up a high-level regulatory reform committee with the aim to promote ‘Ease of Doing Business’ in the country. During the budget 2025-26 presentation on February 1, Sitharaman mentioned that the committee will be tasked to update old laws, and come up with a flexible, people-friendly and trust-based regulatory framework. 

“A high-level committee for regulatory reforms will be set up for a review of all non-financial sector regulations, certifications, licenses and permissions,” said FM Sitharaman. 

The state governments will also be contributing to the regulatory reforms committee, Sitharaman added. The committee will submit its report within a year.

Deregulation: A persistent theme to attract private sector 

Deregulation isn’t just a key theme of budget 2025-26, the Economic Survey released a day before too highlighted the same vision. 

Chief Economic Advisor (CEA) V Anantha Nageswaran has highlighted the significance of the government “getting out of the way” and “rolling back regulations” to push private sector innovation and encourage competition.

Also Read: Economic Survey Bats for More Deregulation to Drive Growth of Firms, Economy 

“Accelerating and amplifying the deregulation agenda already underway in the last ten years is the need of the hour...liberalising standards and controls and designing policy prescriptions that reduce the cost and burden of undertaking an economic activity, for citizens and businesses alike,” the survey stated. 

The deregulation theme has been manifested multiple times through various government initiatives and schemes in the last decade, including the goods and services tax (GST), the insolvency and bankruptcy code (IBC), the real estate regulation act (RERA) and development of digital infrastructure via UPI, DBT and UID. 

Karishma R. Phatarphekar, Partner at Deloitte India, said the budget has continued to show its commitment towards simplifying business activities. 

“Reflecting the government’s continued focus on ease of doing business, budget 2025 proposes simplifying the process for determining arm’s length...it remains to be seen whether the freed-up resources and energy of the TPOs will lead to a more detailed and focused scrutiny,” said Karishma R. Phatarphekar, Partner at Deloitte India. 

Additionally, the government has been reducing its capital expenditure and encouraging the private sector to step up. In the union budget 2025-26, the government has increased capital expenditure marginally from Rs 11.11 lakh crore in the last budget to Rs 11.21 lakh crore in this year’s budget, which is up by just 0.9%. 

These initiatives by the government aim to make more room for private sector investment.