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Informist, Thursday, Jan. 29, 2026

 

NEW DELHI – The phase II of the deregulation initiative rolled out in January this year has expanded compliance reduction for additional priority areas such as land, building and construction, utilities and permissions, environment, education, health, labour, and overarching reforms, said the Economic Survey for 2025-26 (Apr-Mar), tabled in Parliament by Finance Minister Nirmala Sitharaman Thursday. The current phase of deregulation demonstrates how disciplined removal of friction can strengthen state capacity at scale, said the survey.

 

It said the outcomes of the compliance reduction and deregulation initiative were visible in reduced compliance burdens, faster approvals, greater reliance on digital processes, and improved predictability for businesses. Outcomes of phase I of deregulation were encouraging, whose experience illustrated a broader lesson that state capacity is built not only through new institutions or additional controls, but through disciplined removal of frictions that impede productive activity, said the survey.

 

Several states and Union territories have also undertaken innovative reforms for deregulation that go beyond the common reform templates, tailored to their specific administrative, economic and spatial contexts, the survey said. This demonstrates how the compliance reduction agenda has encouraged states to internalise deregulation as a continuous governance process rather than a checklist exercise, said the survey. 

 

Showing some examples, the survey said that in Andhra Pradesh and Uttarakhand, the requirement for land conversion or change in land use has been eliminated for specific categories, significantly reducing procedural delays. In Assam, Jammu and Kashmir, Odisha, Puducherry, and Tripura, negative lists have been introduced for mixed land use zones, whereby all activities are permitted unless explicitly prohibited, replacing earlier prescriptive zoning frameworks, said the survey. These measures have reduced land loss, enabled higher utilisation of urban land, and facilitated project execution, particularly for industrial and commercial developments, it added.

 

According to the survey, several states have expanded the use of third-party inspections and self-certification to reduce regulatory bottlenecks. Chhattisgarh, Mizoram, Rajasthan, Tripura, and Uttar Pradesh have introduced third-party inspection mechanisms for building plan approvals, said the survey. For environmental clearances, the Andaman and Nicobar Islands, Andhra Pradesh, Goa, Tamil Nadu, and Uttarakhand have enabled self-certification and third-party certification for consent to operate, reducing dependence on routine departmental inspections, said the survey. These reforms have reduced the fear of penal action for procedural non-compliance and reinforced trust-based regulation, it said.

 

The document said that deregulation, when pursued as a continuous and coordinated governance process, is not a retreat of the state but a strengthening of it. By simplifying rules, clarifying responsibilities, and making processes predictable and time-bound, administrative effort is shifted away from low-value policing toward problem-solving, monitoring, and execution, said the survey. In this sense, deregulation becomes not only a pro-business reform but a mechanism for building state capacity itself, the survey said.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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