Sitharaman reaffirms push for regulatory reforms, trust-based governance to boost businesses, economy

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday reiterated the central government’s commitment to reducing regulatory hurdles and fostering trust-based governance, saying the Union Budget reflects these priorities.

“We are taking decisive steps to transform India into a seamless, export-friendly economy—one where businesses are free to focus on innovation and expansion, not paperwork and penalties,” she said at a post-budget webinar organized by the Department of Financial Services, attended by policymakers and private sector representatives.

Highlighting the need for regulatory reforms, Sitharaman said decriminalizing business-related offences would help industries operate with greater confidence by reducing legal risks.

“A robust manufacturing sector free from unnecessary regulatory bottlenecks will further attract both domestic and foreign investments, driving economic growth,” she added.

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The Union Budget, presented on 1 February, introduced a series of measures aimed at simplifying compliance, modernizing regulations, and attracting investment.

As part of this push, the budget proposed a light-touch regulatory framework to build a trust-based business environment.

She also announced the formation of a High-Level Committee for Regulatory Reforms to review non-financial sector regulations, certifications, licenses, and permissions, with a focus on streamlining processes and enhancing ease of doing business.

Additionally, an investment friendliness index of states, announced by her, will be introduced in 2025 to foster competitive cooperative federalism by evaluating states on their investment climate.

Financial sector reforms

The government will also establish a mechanism under the Financial Stability and Development Council (FSDC) to assess the impact of financial regulations and develop a more responsive regulatory framework for the financial sector, the finance minister had said in her budget speech.

The central government has also committed to reducing compliance burdens, with the Jan Vishwas Bill 2.0 decriminalizing over 100 legal provisions.

On Tuesday, Sitharaman highlighted the scale of ongoing regulatory simplifications, stating, "Our government has removed over 42,000 compliances and decriminalized more than 3,700 legal provisions since 2014."

Beyond regulatory reforms, the finance minister emphasized the government’s focus on capital expenditure as a key driver of economic growth.

She noted that large-scale infrastructure investments are strengthening industries, creating jobs, and laying the foundation for greater private sector participation.

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"For the year 2025-26, total effective capital expenditure is proposed at ₹15.48 trillion, which is 4.3% of GDP, with ₹11.21 trillion allocated as core capital expenditure by the Centre—equivalent to 3.1% of GDP," she said.

Sitharaman added that these measures would not only create a more business-friendly environment but also position India as a globally competitive hub for investment, fostering long-term economic growth and resilience.