Steps taken by states to ease regulatory and compliance burden are welcome

There are several areas such as land, labour, utilities and logistics where regulations need to be streamlined and the compliance burden eased. A report from Teamlease earlier this year titled “Compliance 3.0”, had, for instance, noted that businesses in India are “governed by 1,536 acts and rules, 69,233 compliances and 6,618 filings”. Though there may have been some improvement in the situation, those figures nonetheless indicate the scale and extent of the challenge of regulation. The compliance burden, the report had pointed out, tends to increase as a company grows, forcing firms to remain small. In the case of land, another contentious area, a study quoted in the Economic Survey 2024-25, titled, “State of Regulation: Building standards reforms for jobs and growth”, notes that factories in India lose a significant portion of land to building standards. These regulations lead to the locking up of productive land and reduce opportunities to create jobs. Several of these areas lie under the ambit of state governments, making them critical to easing the regulatory burden. The Economic Survey had argued that “complementing the efforts of the Centre, states must pursue systematic deregulation as a policy priority”. A careful analysis of the costs and benefits of regulations needs to be undertaken. Greater economic freedom must be provided to agents in the country. As the Survey noted, “strategic and systematic deregulation can catalyse growth, innovation, and competitiveness”.