A parliamentary committee has urged the government to conduct independent audits to ensure business reforms are actually making life easier for companies. With businesses still navigating over 69,000 compliance requirements, the panel suggests shifting to automated inspections and self-reporting to cut operational friction. This could potentially lower compliance costs and improve efficiency for businesses across India.
A parliamentary panel has recommended that the Department for Promotion of Industry and Internal Trade (DPIIT) implement regular, third-party evaluations of its Ease of Doing Business (EoDB) initiatives. While the government has introduced various reforms, the committee noted in its latest report, "Doing Business in India: The Way Forward," that the ground-level impact remains uneven. Despite years of efforts, companies in India are still dealing with a massive regulatory landscape consisting of 1,536 Acts and over 69,000 separate compliance requirements.
The committee stressed that while reform announcements are frequent, their actual benefit to businesses needs validation through external, objective audits. The panel observed that even with simplified central rules, local-level bottlenecks persist in many states. To bridge this gap, the committee proposed that the government expand the District Business Reform Action Plan (D-BRAP) to create a single, comprehensive dashboard. This system would ideally integrate all state-level approvals, business renewals, and exit filings into the existing National Single Window System (NSWS) platform, with mandatory 'deemed approval' provisions to prevent unnecessary delays.
A significant focus of the panel's recommendation is the reduction of operational disruption caused by regulatory inspections. Currently, manufacturing units often face multiple, parallel inspections from various departments under different laws, which causes downtime and increases costs. The committee advised the government to move away from these discretionary, department-by-department checks toward an automated, 'Joint Site Inspection' framework. For lower-risk industries, the panel suggested that the government move toward a trust-based model involving self-reporting and third-party certifications, which would reduce the need for constant government oversight.
Separately, the Joint Parliamentary Committee (JPC) on the Corporate Laws (Amendment) Bill, 2026, has also suggested further simplifications to corporate compliance. These recommendations include replacing certain minor violations with a fixed penalty of Rs 50,000 and easing Corporate Social Responsibility (CSR) norms for smaller companies by allowing in-kind contributions. These changes are intended to allow businesses to focus more on operations rather than administrative overhead.
For investors, the success of these reforms is a critical monitorable. High compliance costs and complex regulatory hurdles often act as a 'hidden tax' on businesses, affecting profit margins and capital efficiency, especially for smaller firms and the manufacturing sector. If the government adopts these recommendations—specifically the shift to automated inspections and third-party audits—it could lead to improved operational transparency and reduced compliance-related expenses. Investors will now watch how effectively the DPIIT implements these changes and whether states align their local rules to match the proposed central integration on the single window portal.