GOVT to introduce Light-Touch Regulatory Framework
3 mins read

GOVT to introduce Light-Touch Regulatory Framework

SUMMARY

Finance Minister Nirmala Sitharaman said that an “easy-to-impact framework” will keep up with technology and global trends

A high-level committee will review regulations, licenses and certifications in the non-financial sector

The government will launch an investment friendliness index in 2025. This will promote competitive cooperative federalism among states

The government has announced new reforms in the budget in 2025 to improve the ease of doing business. The focus is on modernizing regulations and creating a trust -based framework.

In its budget speech 2025 on Saturday (February 1), Finance Minister Nirmala Sitharaman said that a “light-stirring rules” will keep up with technology and global trends. She said it would do it create a business -friendly environment.

Four important steps will be taken in this direction:

High level committee for supervisory reforms: High-level committee will review regulations, licenses and certifications in the non-financial sector. It will submit recommendations within a year. The goal is to streamline compliance and inspections. States will be encouraged to participate.

“We want a trust -based economy. Obsolete rules must not hold back business growth, ”Sitharaman said.

Investment friendliness index for states: The government will launch an investment friendliness index in 2025. This will promote competitive cooperative federalism among states.

Review mechanism for economic regulations: A new mechanism under Financial Stability and Development Council (FSDC) will assess financial regulations. It will ensure better government response and growth of the financial sector.

Jan Vishwas Bill 2.0: Jan Vishwas Bill 2.0 will simplify laws further. It will decriminalize over 100 provisions in different laws. This follows Jan Vishwas ACT 2023, which decriminalized over 180 provisions.

Furthermore, the government has introduced key reforms to facilitate trade and facilitate compliance with legislation. A two -year time limit, extendable by one year, will now apply to provisional assessments in accordance with the Customs Act, 1962, which reduces the uncertainty for companies.

A voluntary compliance system enables importers and exporters to explain material facts and pay information with interest, but without penalties unless investigation.

In addition, the time limit for final use of imported inputs has been extended from six months to one year, and importers will now submit quarterly instead of monthly statements, which facilitates administrative requirements.

Not only this, the government also runs for a completely digital tax system within two years, and Vivad se Vishwas system has already helped to resolve disputes for 33,000 taxpayers.

In order to increase start-up companies and investments, tax benefits according to section 80-ISC will be extended for five more years, which covers startups that are included before April 1, 2030. Capital gains tax rates will be standardized for non-resident investors, including foreign institutional investors (FIIS).

Charity confidence and institutions will see streamlined regulations, with smaller units that now enjoy a 10-year registration validity instead of five. Smaller default values, such as incomplete applications, will not result in automatic deregistration.

“This budget is about removing obstacles and promoting trust. A modern regulation method will increase productivity and create jobs, says Finance Minister Nirmala Sitharaman.