Ease of Doing Business: Strengthening India’s Business Framework

Syllabus: GS3/ Economy

Context

• India has undertaken wide-ranging reforms to create a transparent, technology-driven, and trust-based business ecosystem, improving investor confidence and enhancing its global competitiveness.

India’s Progress in Ease of Doing Business

• India improved its rank in the World Bank’s Doing Business Report from 142 in 2014 to 63 in 2019, reflecting significant improvements in the regulatory environment.
• India’s position in the IMD World Competitiveness Ranking improved from 43 in 2021 to 41 in 2025.
• India has consistently been placed in Group A of the World Bank’s GovTech Maturity Index, indicating advanced digital governance capabilities.
• The United Nations E-Government Survey has recognized India’s progress in online public services, digital infrastructure, and technology-enabled governance.

Reforms in Business Entry and Formalisation

• Startup Ecosystem Development: The Startup India initiative has promoted innovation, entrepreneurship, and job creation through financial support, incubation facilities, and regulatory incentives.
  • The number of recognised startups increased from 502 in 2016 to more than 2.23 lakh by March 2026.
• Simplification of Company Incorporation: The SPICe+ platform has integrated multiple registrations such as PAN, TAN, GST, EPFO, ESIC, and bank account opening into a single online application.
• MSME Formalisation: The Udyam Registration Portal has enabled paperless and self-declaration-based registration of MSMEs.

Reforms in Land and Property Administration

• The Digital India Land Records Modernisation Programme (DILRMP) has digitised land records and cadastral maps, reducing disputes and improving transparency.
  • The Unique Land Parcel Identification Number (ULPIN) has created a unique digital identity for land parcels, enabling accurate land management.

• National Generic Document Registration System (NGDRS) has streamlined property transactions, promoting EoDB by offering a complete user interface for property and document registration.

Streamlining Regulatory Approvals

• Labour Reforms: The Labour Codes have consolidated multiple labour laws into simplified legal frameworks.
  • Single registration, single returns, and all-India licences have reduced compliance costs for businesses.
• The National Single Window System (NSWS) provides a unified platform for obtaining approvals and clearances from multiple ministries and states.
• Environmental Clearances: The PARIVESH portal has digitised environmental, forest, wildlife, and coastal regulation clearances.

Improving Market Access and Logistics

• Government e-Marketplace (GeM) has expanded procurement opportunities for MSMEs, startups, women entrepreneurs, and self-help groups through a transparent digital platform. It has promoted inclusive participation in public procurement.
• Open Network for Digital Commerce (ONDC) has created an open and interoperable digital commerce ecosystem that enables small businesses to compete on equal terms with large e-commerce platforms.
• PM GatiShakti has improved multimodal connectivity through integrated infrastructure planning.

Facilitating Access to Credit

• Pradhan Mantri Mudra Yojana: PM Mudra Yojana has expanded financial inclusion by providing collateral-free loans to micro and small enterprises.
• The Credit Assessment Model utilises digital financial data for automated loan appraisal, reducing processing time and improving credit delivery.
• Trade Receivables Discounting System (TReDS) has improved liquidity for MSMEs by enabling faster realisation of payments from corporate buyers and government entities.

Tax Reforms and Compliance Simplification

• Goods and Services Tax (GST): It  has replaced multiple indirect taxes with a unified tax structure, creating a common national market.
  • It has reduced tax cascading, improved transparency, and facilitated interstate trade.
• The E-Way Bill system has streamlined the movement of goods across states by replacing multiple permits with a single electronic document.

Enhancing Cross-Border Trade

• The Districts as Export Hubs (DEH) initiative aims to promote exports, manufacturing, and employment at the grassroots level.
• ICEGATE (Indian Customs Electronic Gateway) serves as a centralized hub for all electronic interactions between Indian customs and the trading community.
  • It offers a range of services including e-filing, online amendment submission, online duty payment, query resolution.
• Trade Connect e-Platform provides comprehensive international trade information and services to all exporters, including MSMEs, enabling them easy access to global markets.

Expanding Digital Public Infrastructure

• Unified Payments Interface (UPI) has transformed digital payments by enabling instant, secure, and low-cost transactions.
• EntityLocker a digital locker for the entities empowers organizations by providing a secure, cloud-based platform for storing, sharing, and verifying digital documents and certificates.

Building a Trust-Based Governance Framework

• Jan Vishwas Reforms have decriminalised hundreds of minor business-related offences. These reforms have reduced the fear of criminal prosecution for procedural violations and encouraged voluntary compliance.
• The Insolvency and Bankruptcy Code (IBC), 2016 established a time-bound framework for insolvency resolution.
  • Subsequent amendments have improved procedural efficiency, strengthened creditor rights, and enhanced investor confidence.

Challenges

• Land acquisition and contract enforcement continue to face delays due to disputes, procedural complexities, and judicial backlogs.
• Implementation of reforms varies across States and districts, leading to an uneven business environment.
• Logistics costs remain relatively high compared to competing economies, affecting industrial competitiveness.
• MSMEs continue to face constraints in accessing finance, technology, skilled manpower, and global markets.
• Commercial dispute resolution remains time-consuming, despite improvements in insolvency and regulatory frameworks.
• Global economic uncertainties and supply chain disruptions continue to pose risks to investment and trade growth.

Way Ahead

• Reduce logistics costs by expanding multimodal connectivity, improving warehousing infrastructure, and enhancing last-mile connectivity.
• Enhance MSME competitiveness through easier access to finance, technology adoption, skill development, and integration into global value chains.
• Accelerate land and judicial reforms to ensure faster land acquisition, contract enforcement, and commercial dispute resolution.
• Promote innovation and digital transformation to improve productivity, attract investments, and support India’s transition towards a globally competitive economy.

Source: PIB