Notwithstanding the growth figures, India has consistently come up short when one considers the potential we have as a country. With approximately 2% of global trade, and some of the highest customs duties and non-tariff barriers in the world, we have a long way to go before we become truly competitive and stake our rightful claim in the global trading order. China, with all the tariff turbulence, has a trade surplus of nearly 1.2 trillion dollars in 2025. While we can challenge the numbers, we would be better served by reforming our own backyard.Decades ago, as India was emerging as a software giant, one lament was that we did not deploy our own technical expertise domestically. Today, with the largest biometric database for Indian residents, a payment network that is the envy of developed countries and a plethora of other initiatives – India is using its software expertise to make everyday lives better – and we are all enjoying the benefits. What prevents us from doing this for the manufacturing industry?
Over the years, Union Budgets in India have emphasised growth, manufacturing, infrastructure, and innovation, and have deployed a wide range of fiscal tools—tax incentives, production-linked incentives (PLIs), credit support, and sectoral subsidies to attract investment and enhance competitiveness. These have failed to unleash the full potential we have as a country. Today, with unprecedented global uncertainty, artificial intelligence impacting the future of work and the largest (and youngest) population in the world, we need to do something drastic. To put it simply, we need another 1991 budget moment.
The incumbent government came in on a strong anti-corruption platform – in the aftermath, a series of economic laws were enacted and/or amended to rid the country of this malaise. Hindsight has shown that this has not had the desired effect and has, in many ways, made Indian entrepreneurs and businesses more risk-averse in their approach. Excessive, overlapping, and weakly coordinated regulation is a drag on the economy.
We cannot afford to have a Union Budget as another annual financial statement. It should become a strategic instrument to drive legal and procedural simplification across ministries and regulators, and to embed inter‑ministerial coordination as a core design principle of economic governance. This Union Budget should break the shackles and set Indian industry free of overregulation.
It is not that this is unknown. A few days ago, the Government of India announced that disputing government entities will no longer approach courts and will now internally settle matters. This will only apply where no private party is involved.
Data will reveal that often, a private party is involved, but such cases will continue to be adjudicated in courts. In such an instance, the private party is often at the receiving end. We are seeing this where laws and agencies such as EOW, ED and SFIO overlap – all attaching the same assets! In IBC, long after the bidders are selected, agencies still show up belatedly to claim statutory dues – and the jurisprudence is ambiguous in many instances – which leads to hardship for creditors, bidders and the target company alike. Why can’t such overlapping claims, which involve a private party, be resolved internally, too? Where is the need to have multiple government agencies attaching the same assets?
Even in establishing new industries, there are several overlaps in the state and central governments and in ministries. By way of example, multiple approvals for the same project (e.g., land use, environmental impact, building and fire safety, utilities) are required. This imposes costs in time, legal resources, and uncertainty.
To boost the investment climate, the need is for clarity of regulations, predictability of enforcement, transparency in implementation and credibility of commitments. No amount of fiscal benefits can top these fundamental requirements.
India, being a large market, does attract investment – but largely these industries are supplying domestic markets. India, as a hub for India is easy to build given the high tariff barriers – India as a hub for the world, requires a climate that is conducive to the establishment and operation of industry.
Where such uncertainty persists, investors may favour a jurisdiction with fewer incentives but stable, rule‑bound regulation over one with generous incentives but volatile regulatory practice. This reality places regulatory reform and institutional strengthening squarely at the heart of economic competitiveness.
Some low hanging fruits which can be tackled in the Budget include:
- Making regulatory impact assessment compulsory where new and existing laws are analysed to quantify expected compliance costs and demonstrate alignment with Budget priorities such as “Make in India,” infrastructure acceleration, or MSME promotion.
- The Finance Bill amendments should introduce legal doctrines such as “file‑once, use‑many” and “deemed approval after expiry of statutory timelines,” with appropriate safeguards.
- Ministries could be mandated to identify and repeal redundant rules each year as part of a “regulatory housekeeping” exercise linked to Budget performance.
Such reforms would align India’s regulatory framework with the strategic goals expressed by the government and improve investor confidence, lowering transaction costs. This will ensure that fiscal incentives translate into real, sustainable gains in competitiveness and ease of doing business.
We need structural reform to unleash the full potential of Indian entrepreneurship. Ease of doing business needs to be supercharged – what better time than the upcoming budget?
(Views are personal)
