{"id":63065,"date":"2025-12-31T19:34:08","date_gmt":"2025-12-31T14:04:08","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=63065"},"modified":"2025-12-31T19:38:07","modified_gmt":"2025-12-31T14:08:07","slug":"india-economic-reforms-2025","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/31-12-2025\/india-economic-reforms-2025","title":{"rendered":"India\u2019s 2025 Economic Reforms"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Economic reforms in 2025 reflect a maturing phase of India\u2019s governance, where the emphasis shifted decisively from \u201cexpanding regulatory frameworks\u201d to \u201cdelivering measurable outcomes\u201d.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Reforms Shaping Growth and Opportunity<\/strong><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img data-dominant-color=\"c4d7e1\" data-has-transparency=\"false\" style=\"--dominant-color: #c4d7e1;\" loading=\"lazy\" decoding=\"async\" width=\"425\" height=\"260\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-165.png\" alt=\"\" class=\"not-transparent wp-image-63066\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-165.png 425w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-165-300x184.png 300w\" sizes=\"auto, (max-width: 425px) 100vw, 425px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Income Tax Reforms<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Union Budget 2025-26 <strong>exempted the annual incomes up to \u20b912 lakh<\/strong> from income tax under the new regime, with the effective exemption rising to \u20b912.75 lakh for salaried taxpayers on account of the standard deduction.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Government announced a comprehensive overhaul of the Income-tax Act, 1961, resulting in the <strong>New Income Tax Act, 2025.\u00a0<\/strong><\/li>\n\n\n\n<li><strong>The Act strengthens<\/strong> digital-first enforcement, faceless tax administration, consolidates compliance provisions such as Tax Deducted at Source (TDS) under a single section etc.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Rural Employment Reforms<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Rural employment reforms anchored in the enactment of the <strong>Viksit Bharat &#8211; Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025,<\/strong> replacing the <strong>Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Extended Employment Guarantee:<\/strong> <strong>125 days<\/strong> of wage employment per rural household in a financial year.<\/li>\n\n\n\n<li><strong>Strengthened Administrative Capacity:<\/strong> The administrative expenditure ceiling has been increased from <strong>6% to 9%<\/strong>, strengthening staffing, training, technical capacity, and field-level support to improve institutional delivery and outcomes.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Ease of Doing Business Reforms<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>To ensure that Quality Control Orders (QCOs) do not disrupt domestic production, the Government has implemented them in a phased and MSME-friendly manner through the Bureau of Indian Standards (BIS).<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"b6d2df\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"602\" height=\"281\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-167.png\" alt=\"\" class=\"not-transparent wp-image-63068\" style=\"--dominant-color: #b6d2df; width:474px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-167.png 602w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-167-300x140.png 300w\" sizes=\"auto, (max-width: 602px) 100vw, 602px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>GST 2.0 Reforms<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Simpler Tax Structure: <\/strong>The move to a <strong>two-slab GST regime (5% and 18%)<\/strong> reduces complexity, classification disputes, and compliance costs.<\/li>\n\n\n\n<li><strong>MSME and Startup Enablement:<\/strong> Faster refunds, simplified registration and returns, and lower input costs aim is to boost the present businesses and startups and incentivise the youth to enter into businesses and initiate startups.<\/li>\n\n\n\n<li><strong>Wider Tax Base and Revenue Stability: <\/strong>Simpler rates and improved compliance have expanded the GST taxpayer base to over 1.5 crore, while gross collections reached <strong>\u20b922.08 lakh crore in FY 2024\u201325<\/strong>, reinforcing fiscal sustainability.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Labour Reforms<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Government of India consolidated <strong>29 existing labour laws into four Labour Codes<\/strong>;\n<ul class=\"wp-block-list\">\n<li>The Code on Wages, 2019,\u00a0<\/li>\n\n\n\n<li>the Industrial Relations Code, 2020,\u00a0<\/li>\n\n\n\n<li>the Code on Social Security, 2020 and\u00a0<\/li>\n\n\n\n<li>the Occupational Safety, Health and Working Conditions Code, 2020.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Export Promotion mission<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Announced in the Union Budget 2025\u201326,<\/strong> EPM marks a strategic shift from fragmented export support schemes to a single, outcome-based and digitally driven framework, aimed at empowering MSMEs, first-time exporters, and labour-intensive sectors.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"ced5dd\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"481\" height=\"406\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-166.png\" alt=\"\" class=\"not-transparent wp-image-63067\" style=\"--dominant-color: #ced5dd; aspect-ratio:1.184741461791256;width:392px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-166.png 481w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/12\/image-166-300x253.png 300w\" sizes=\"auto, (max-width: 481px) 100vw, 481px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Digital Divide: <\/strong>Digital-first governance in taxation, trade, and welfare delivery risks <strong>exclusion of smaller firms<\/strong> and workers lacking digital literacy or infrastructure.<\/li>\n\n\n\n<li><strong>Global Economic Uncertainty: <\/strong>Sluggish global demand, geopolitical tensions, and supply-chain disruptions could limit export growth despite domestic reform momentum.<\/li>\n\n\n\n<li><strong>MSME Compliance Burden: <\/strong>Despite simplification, smaller enterprises still struggle with digital compliance, quality standards, and access to affordable credit, particularly in semi-urban and rural areas.<\/li>\n\n\n\n<li><strong>Centre\u2013State Coordination: <\/strong>Reforms such as GST 2.0, labour codes, and rural employment require strong fiscal and administrative coordination, which continues to face operational frictions.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The reforms reflect a <strong>shift towards outcome-based governance, <\/strong>reducing friction for citizens and businesses, enhancing transparency, and laying the foundation for sustained, inclusive growth.\u00a0<\/li>\n\n\n\n<li>The measures collectively <strong>foster trust, resilience, and global competitiveness<\/strong> in India\u2019s economy.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2209734&amp;reg=6&amp;lang=1\" target=\"_blank\" rel=\"noopener\"><strong>PIB<\/strong><\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>Context<\/strong><\/p>\n<li class=\"ms-5\">Economic reforms in 2025 reflect a maturing phase of India\u2019s governance, where the emphasis shifted decisively from \u201cexpanding regulatory frameworks\u201d to \u201cdelivering measurable outcomes\u201d.<\/li>\n<p><\/p>\n<p><strong> Income Tax Reforms <\/strong><\/p>\n<li class=\"ms-5\">The Union Budget 2025-26 exempted the annual incomes up to \u20b912 lakh from income tax under the new regime, with the effective exemption rising to \u20b912.75 lakh for salaried taxpayers on account of the standard deduction. <\/li>\n<li class=\"ms-5\">The Government announced a comprehensive overhaul of the Income-tax Act, 1961, resulting in the New Income Tax Act, 2025.\u00a0 <\/li>\n<li class=\"ms-5\">The Act strengthens digital-first enforcement, faceless tax administration, consolidates compliance provisions such as Tax Deducted at Source (TDS) under a single section etc. <\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/31-12-2025\/india-economic-reforms-2025\" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-63065","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/63065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=63065"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/63065\/revisions"}],"predecessor-version":[{"id":63071,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/63065\/revisions\/63071"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=63065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=63065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=63065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}