Despite a massive multi-year government exercise to reduce the compliance burden on businesses, industry stakeholders told a parliamentary panel that a firm operating in India still navigates thousands of laws which undermine investment intent.
The Parliamentary Standing Committee on Commerce was told that a typical firm operating in India must currently navigate an archaic and disconnected web of regulations consisting of 1,536 distinct Acts, which collectively impose 69,233 separate compliance requirements and mandate 6,618 independent statutory filings across the three tiers of Government.
For its report, “Doing Business in India: The Way Forward,” the committee interacted with the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI), the Federation of Indian Export Organisations (FIEO), freight forwarders, women entrepreneurs retailers, warehousing and air cargo.
Along with the business and industry representatives, officials from Ministries of Commerce and Industry, Shipping, Environment, Electronics, and Civil Aviation, among others also appeared before the committee.
Over the past few years pan-India rationalization drives have successfully neutralized over 47,000 regulatory obligations. Stakeholders said, “The survival of overlapping rules continues to inflate fixed operational costs and suppress long-term capital deployment.”
Giving an example of the four labour codes, the industry said each Central law is accompanied by a range of State-specific legislations, along with both Central and State regulations, adding layers of complexity to the legal landscape.
Stakeholders highlighted that due to this slow transition, corporate entities are still structurally bottlenecked by having to concurrently comply with 44 separate Central statutes and more than 100 distinct State-specific Labour laws, each maintaining its own independent reporting cycles, standard registers and manual compliance procedures.
Although a clear majority of State governments have enacted Right to Services or Public Service Guarantee Acts, the lack of an overarching Central legislative backup coupled with the absence of automated, system-triggered “deemed approval” mechanisms renders these statutory timelines practically ineffective. This breakdown severely compromises the utility of the National Single Window System (NSWS) launched in 2021.
They also emphasized that the friction between policy design and field-level execution is highly pronounced within the country’s tax administration architecture, causing severe, artificial drains on corporate liquidity. They also pointed to delays in clearances which in some cases is triggered by several regulatory authorities performing a similar function.
To address these issues, the panel has instructed the involved departments to work on reducing the restrictions and locating areas that add to the burden of businesses.