A parliamentary panel has flagged India's heavy compliance burden, stating that overlapping rules and approvals continue to raise business costs despite deregulation efforts. According to the department-related parliamentary standing committee on commerce's report on 'Doing Business in India: The Way Forward', stakeholders informed the panel that despite multi-phased central deregulation efforts, the absolute volume of business compliances remains a major friction point for domestic enterprises. The committee noted that while pan-India rationalisation drives have successfully reduced, simplified, digitised or decriminalised more than 47,000 regulatory obligations under the government's 'Reducing Compliance Burden initiative', the survival of overlapping rules continues to inflate fixed operational costs and suppress long-term capital deployment. As per the committee, stakeholders apprised that despite multi-phased central deregulation efforts, the absolute volume of business compliances remains an overbearing friction point for domestic enterprise interface.
The report reveals the extent of India's regulatory complexity, stating that a typical firm operating in India currently navigates an archaic and disconnected web of regulations consisting of 1,536 distinct Acts, which collectively impose 69,233 separate compliance requirements and mandate 6,618 independent statutory filings across the three tiers of government. As reported by the committee, stakeholders highlighted that due to slow transition, corporate entities are still structurally bottlenecked by having to concurrently comply with 44 separate Central statutes and more than 100 distinct State-specific Labour laws, each maintaining its own independent reporting cycles, standard registers and manual compliance procedures. The fragmented regulations and multiple approvals at Central and State levels cause delays and increase the cost of doing business, with overlapping compliance requirements leading to duplication of effort.
The committee noted that while the government has enacted the four Labour Codes, which combine 29 central laws and hold the potential to reduce compliance, significant hurdles remain once fully implemented. According to the report, as labour is a concurrent subject, each Central law is accompanied by a range of State-specific legislations, along with both Central and State regulations, adding layers of complexity to the legal landscape. The fragmented regulations and multiple approvals at Central and State levels cause delays and increase the cost of doing business, with overlapping compliance requirements leading to duplication of effort. The committee emphasised that consolidation on paper may not automatically mean simplification in practice, highlighting that what matters is whether a business can obtain an approval without approaching multiple departments, submit information only once, and receive a decision within a predictable timeframe.
The committee has recommended rationalisation and consolidation of regulatory frameworks by adopting risk-based regulations and increasing the use of self-certification and third-party certification. As reported by the panel, during its interactions with various stakeholders, the committee observed that processes for obtaining approvals and issuance of NoCs continue to be time-consuming. The committee also recommended that the Department for Promotion of Industry and Internal Trade (DPIIT) pursue simplification of tax and customs compliance by reducing duplicate documentation, streamlining audit mechanisms, ensuring time-bound disposal of approvals and refunds and promoting end-to-end digital processing. On the issue of consumer protection, the panel said there should be strict enforcement of guidelines relating to dark patterns and misleading advertisements on digital platforms. Additionally, Finance Minister Nirmala Sitharaman has confirmed ongoing import tariff rationalisation efforts with further measures expected in the budget for 2027-28, while outlining the Viksit Bharat vision for 2047, which includes zero poverty and universal access to education and healthcare.
According to the parliamentary panel, despite significant policy and digital reforms, the transportation and logistics sector continues to face regulatory, procedural and infrastructure-related constraints that increase logistics costs and adversely affect the ease of doing business. The committee has also recommended that the department undertake periodic third-party evaluations of reform measures to promote ease of doing business and assess their on-ground impact on businesses. Additionally, the panel has suggested creating a strict regulatory check on dynamic pricing to protect users from predatory technology, preventing platforms from using a consumer's search history, device type or location data to artificially inflate prices during checkout.
