Union Budget 2025-26: Key Highlights and Reforms

The Union Finance and Corporate Affairs Minister, Nirmala Sitharaman, presented the Union Budget for 2025-26 in Parliament today. This budget aims to address various economic challenges while promoting growth and innovation. The focus is on regulatory reforms, investment friendliness, and enhancing the ease of doing business in India. The government is committed to creating a modern regulatory framework that aligns with technological advancements and global standards.
Emphasis on Regulatory Reforms
In her budget speech, Finance Minister Nirmala Sitharaman emphasized the need for regulatory reforms. She stated that the government is determined to ensure that regulations keep pace with technological innovations and global policy developments. A light-touch regulatory framework based on principles and trust will be established. This approach aims to unleash productivity and create more job opportunities.
To develop a modern, flexible, and people-friendly regulatory framework, the minister proposed four specific measures. These measures are designed to update regulations that were established under outdated laws. The government recognizes that a robust regulatory environment is crucial for fostering innovation and attracting investment. By streamlining regulations, the government hopes to enhance the overall business climate in India.
The proposed reforms are expected to benefit various sectors, encouraging businesses to thrive. The focus on a trust-based regulatory framework signifies a shift towards a more collaborative approach between the government and the business community. This initiative aims to create a conducive environment for entrepreneurship and economic growth.
Establishment of a High-Level Committee for Regulatory Reforms
One of the significant announcements in the budget is the establishment of a High-Level Committee for Regulatory Reforms. This committee will review all non-financial sector regulations, certifications, licenses, and permissions. The Finance Minister stated that the committee is expected to make recommendations within a year.
The primary objective of this committee is to strengthen trust-based economic governance. It aims to implement transformational measures that enhance the ease of doing business, particularly concerning inspections and compliance. The government will encourage states to participate in this initiative, fostering a collaborative effort to improve the regulatory landscape across the country.
By focusing on regulatory reforms, the government aims to create a more favorable environment for businesses. This initiative is expected to reduce bureaucratic hurdles and streamline processes, making it easier for entrepreneurs to navigate the regulatory framework. The establishment of this committee marks a significant step towards achieving a more efficient and transparent regulatory system in India.
Launch of the Investment Friendliness Index
In a bid to promote competitive cooperative federalism, the Finance Minister announced the launch of an Investment Friendliness Index of States in 2025. This index will serve as a benchmark for states to evaluate their investment climate. The government believes that this initiative will encourage states to improve their business environments and attract more investments.
The Investment Friendliness Index will assess various factors, including regulatory efficiency, infrastructure quality, and ease of doing business. By providing a clear picture of each state’s investment climate, the index will empower states to identify areas for improvement. This initiative aligns with the government’s broader goal of fostering economic growth and development across the country.
The introduction of this index is expected to create healthy competition among states. It will incentivize them to adopt best practices and implement reforms that enhance their attractiveness to investors. Ultimately, this initiative aims to boost economic activity and create job opportunities at the state level.
Financial Stability and Development Council Mechanism
Another key announcement in the budget is the establishment of a mechanism under the Financial Stability and Development Council (FSDC). This mechanism will evaluate the impact of current financial regulations and subsidiary instructions. The Finance Minister highlighted the importance of formulating a framework that enhances the responsiveness of financial regulations.
The FSDC mechanism aims to ensure that financial regulations are aligned with the evolving needs of the financial sector. By assessing the effectiveness of existing regulations, the government seeks to create a more dynamic and adaptable regulatory environment. This initiative is crucial for maintaining financial stability while promoting growth and innovation in the financial sector.
Additionally, the government plans to introduce the Jan Vishwas Bill 2.0, which aims to decriminalize over 100 provisions in various laws. This follows the Jan Vishwas Act 2023, which already decriminalized more than 180 legal provisions. These efforts reflect the government’s commitment to simplifying regulations and enhancing the ease of doing business in India.
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