Ease of Doing Business, Revisited: Has Compliance Really Become Easier?

Ask whether it has become easier to run a business in India and you will get two answers. Both are honest, both come with data attached, and the two cannot be reconciled.

The official answer is a ledger, and the ledger reads well. Since 2020 the Centre and the states have between them retired more than 47,000 compliances: 16,108 simplified, 22,287 digitised, 4,458 decriminalised and 4,270 deleted outright, according to a Press Information Bureau backgrounder issued in June 2026 on data up to November 2025. The National Single Window System had granted over 8.29 lakh approvals as on 20 November 2025, drawing on 686 central and 7,498 state clearances. A Business Reforms Action Plan 2026 went live in November 2025, and a district-level version carrying 154 reform points followed a month later, on the sensible theory that most entrepreneurs meet the state at a tehsil office rather than at Udyog Bhawan.

The unofficial answer arrives as an invoice. A typical manufacturing MSME still carries more than 1,450 compliance obligations a year and spends ₹13–17 lakh servicing them, on TeamLease RegTech’s June 2026 estimate. The firm’s August 2026 whitepaper counts roughly 69,000 statutory obligations across 1,530 Acts and Rules, some 6,600 filings, and about 13,000 regulatory changes a year published across roughly 3,750 government websites. That is around 80 changes every working day, scattered over three and a half thousand notice boards.

Both answers are true. The gap between them is the story.

The decriminalisation dividend is real

Begin with what has genuinely moved, because a great deal has.

The Jan Vishwas (Amendment of Provisions) Act, 2026 is the most consequential piece of business legislation of the year and among the least discussed. The Lok Sabha passed it on 1 April 2026, the Rajya Sabha a day later, and it received Presidential assent on 7 April. It touches 79 Central Acts across 23 ministries and reworks 784 provisions, of which 717 are decriminalised and 67 are aimed at ease of living. Set that beside Jan Vishwas 2023, which covered 183 provisions across 42 Acts, and the change of gear is obvious.

This matters more than a rate cut. The 2022 ORF–TeamLease study Jailed for Doing Business found 26,134 imprisonment clauses sitting inside India’s business laws, with nearly two of every five compliance obligations carrying a jail risk. A late filing and an act of deliberate fraud could, in principle, put the same promoter in the same lock-up. Converting that to a civil penalty adjudicated by a designated officer changes the psychology of running a small firm, which is not a small thing.

Tax has moved too. GST 2.0 collapsed the rate structure to 5 and 18 per cent, with a 40 per cent demerit rate, from 22 September 2025. Registration now clears in three working days for low-risk applicants, and the taxpayer base has grown from 66.5 lakh in 2017 to 1.65 crore by May 2026. The GST Appellate Tribunal, provided for in the CGST Act, 2017 but missing for the eight years that followed, was launched on 24 September 2025 with a Principal Bench in Delhi and 31 State Benches across 45 locations. The Income-tax Act, 2025 came into force on 1 April 2026, retiring a statute that had been patched for six decades.

Labour law, the most overgrown thicket of the lot, was finally pruned. The four Codes took effect on 21 November 2025, consolidating 29 Central Acts. The Labour Ministry’s own compliance handbook puts the arithmetic plainly: 1,228 sections become 480, 181 forms become 73, 84 registers become 8, and 31 returns become a single electronic return.

“A law is only as light as its last mile. India has rewritten the statute book with real conviction. The counter clerk, the state rule and the filing portal have not finished reading it.”

What the ledger does not count

Now the other column.

An Act passed is not an Act in force. The Jan Vishwas 2026 amendments commence on dates the Central Government appoints by notification, and those dates may differ for each of the 79 statutes in the Schedule. Twenty-three ministries must each issue a commencement notification and appoint adjudicating officers. Until they do, the 717 decriminalised provisions are decriminalised on paper. The same shadow falls across the labour codes: draft Central Rules were published on 30 December 2025, and state rules, which decide what an inspector actually asks for, will arrive at their own pace across three dozen jurisdictions.

The burden is also, mostly, not central. TeamLease RegTech’s data puts roughly 80 per cent of imprisonment clauses in state legislation and 68 per cent under labour laws. Delhi’s reform ledger can grow impressively while the file that decides a factory’s fate sits in a state directorate with no counter of its own.

Then there is the quiet substitution of digitisation for simplification. Of the 47,000 compliances retired, 22,287 were digitised, meaning moved online rather than removed. Ask any company secretary how that felt during the December 2025 annual filing season. On 20 December 2025 the Institute of Company Secretaries of India wrote to the Ministry of Corporate Affairs about the MCA-21 V3 portal: AOC-4 PDFs failing to generate, XBRL validation errors, MGT-7 Excel uploads collapsing, SRNs cancelled on forms that had been duly uploaded, and the site slowing or falling over between 3 and 8 p.m. The Institute asked for an immediate fix or an extension to 31 March 2026. A form that cannot be filed is not a simplified form.

It is also worth noticing that easing in one direction has been accompanied by tightening in another. From the July 2025 tax period, the auto-populated outward liability in GSTR-3B has been hard-locked, so a figure taxpayers once adjusted at the last minute now flows straight from GSTR-1 and the Invoice Management System. Separately, from 1 October 2025, GST returns cannot be filed at all once three years have passed from the due date. Neither change is unreasonable; both are, in fact, the natural price of a pre-filled, data-driven system. But they alter what compliance demands. The work shifts from filling a form correctly in month twelve to keeping the underlying data clean in month one, and the penalty for drift is no longer a late fee but a permanently closed window. Simpler forms and less forgiving systems can arrive together, and for a small business without a finance team, the second can outweigh the first.

Most stubbornly, the dispute machinery has not kept pace with the reform machinery. On data placed before the Rajya Sabha, as on 31 March 2025 some ₹16.75 lakh crore was tied up in 5.39 lakh appeals pending before the first appellate authority alone, up from 4.48 lakh appeals in FY 2020-21, with over ₹25 lakh crore locked across all appellate levels. The Insolvency and Bankruptcy Code, built around a 330-day outer limit, is averaging 757 days to resolution, with close to three-quarters of ongoing cases already past 270 days, on IBBI figures analysed by CareEdge Ratings this August. Entry has become easier. Exit has not.

We may be measuring the wrong thing

The deeper problem is one of metrics. India counts reform the way a gym counts equipment rather than fitness. Compliances removed, processes digitised, approvals issued: these are inputs. What a business actually experiences is cycle time. Days from application to permission. Rupees per year of filings. The odds of a notice landing in the inbox.

The World Bank’s B-READY framework, successor to the discredited Doing Business rankings, is built around exactly this distinction. It scores the regulatory framework, the public services that support it and, critically, operational efficiency, which is the difference between what the rule book promises and what the counter delivers. India is being assessed in the 2026 cycle, and the result will be the first independent, methodologically consistent read on Indian compliance since 2019.

That will be an uncomfortable mirror, and a useful one. The Task Force on compliance reduction constituted in January 2025 has already completed three rounds of state visits focused on land use, building and construction, labour, utilities and permissions, which suggests the government has a fair idea of where the friction lives.

So, has compliance become easier?

Yes, and unevenly.

For a promoter incorporating a company, registering for GST, filing returns and dealing largely with the Centre, the last three years have delivered real relief. Fewer criminal provisions, fewer forms, faster registration, a rewritten income-tax statute, and a GST tribunal that finally exists.

For an established manufacturer with plants in three states, a contract workforce, a pending environmental clearance and a tax appeal in the queue, the arithmetic is less flattering. The rules are cleaner, the systems are wobblier, the states are slower, and the exit door still takes the better part of two years to open.

The reform is genuine. Delivery is the unfinished half. India has spent five years rewriting its statute book with unusual seriousness, and the next five will be judged on whether the state rule, the counter clerk, the portal and the tribunal catch up with it. Compliance has certainly become easier to describe. It has not yet become easy.

Sources

1. PIB Backgrounder, “Ease of Doing Business: Strengthening India’s Regulatory Framework” (7 June 2026) — https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=158804&ModuleId=3&reg=3&lang=1

2. PIB, “Ease of Doing Business: India’s Ongoing Regulatory Transformation” (5 February 2026) — https://static.pib.gov.in/WriteReadData/specificdocs/documents/2026/feb/doc202625780701.pdf

3. PIB, “India’s Ease of Doing Business Performance Strengthened; World Bank B-READY Assessment Scheduled in 2026” (10 February 2026) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2225808&reg=3&lang=1

4. PIB, “Jan Vishwas (Amendment of Provisions) Bill, 2026” (April 2026) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2248925&reg=3&lang=1

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7. The Jan Vishwas (Amendment of Provisions) Act, 2026 — Gazette of India (8 April 2026) — https://dgde.gov.in/en/document/the-jan-vishwas-amendment-of-provisions-act-2026/

8. PIB, “Nine Years of GST: Simplifying Taxation, Strengthening India” (2026) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2279318&reg=3&lang=1

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10. PIB, Launch of the Goods and Services Tax Appellate Tribunal (24 September 2025) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2170932&reg=3&lang=2

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12. Ministry of Labour & Employment, Compliance Handbook for Employers Under the Four Labour Codes (February 2026) — https://www.labour.gov.in/static/uploads/2026/02/83978455025732b99b0165def80ab171.pdf

13. Ministry of Labour & Employment, Labour Codes (FAQs and notifications) — https://www.labour.gov.in/en/labour-codes

14. PIB, “DPIIT Launches District Business Reform Action Plan” (December 2025) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2204665&reg=1&lang=1

15. DPIIT, Business Reforms Action Plan portal — https://eodb.dpiit.gov.in/

16. ICSI, Representation to MCA on the functioning of the MCA-21 V3 Portal (20 December 2025) — https://www.icsi.edu/media/webmodules/DCL/Functioning_of_MCA21_V3_Portal_Issues_and_Challenges_faced_by_stakeholders_20.12.2025.pdf

17. Business Standard, “ICSI flags glitches, timeouts on MCA V3 portal as filing deadline nears” (24 December 2025) — https://www.business-standard.com/economy/news/icsi-flags-glitches-on-mca-v3-portal-as-annual-filing-deadline-nears-125122400764_1.html

18. Observer Research Foundation & TeamLease RegTech, “Jailed for Doing Business: The 26,134 Imprisonment Clauses in India’s Business Laws” (February 2022) — https://www.orfonline.org/research/jailed-for-doing-business

19. TeamLease RegTech, press releases and compliance research (June–August 2026) — https://www.teamleaseregtech.com/press/

20. World Bank, Business Ready (B-READY) — https://www.worldbank.org/en/businessready

21. World Bank, B-READY Methodology Handbook, Third Edition (January 2026) — https://thedocs.worldbank.org/en/doc/6364c306d685203c859c60a075df5c3a-0540012026/original/B-READY-MH-2026.pdf

22. Insolvency and Bankruptcy Board of India — https://ibbi.gov.in/

23. Business Today, “Why delays in resolution remain a key challenge under insolvency process” (19 August 2026) — https://www.businesstoday.in/latest/corporate/story/why-delays-in-resolution-remain-a-key-challenge-under-insolvency-process-550171-2026-08-19

24. Taxscan, report on income-tax dispute data placed before the Rajya Sabha — https://www.taxscan.in/top-stories/over-25-lakh-crore-locked-up-in-incometax-disputes-across-appellate-levels-centre-shares-data-1439857

25. Taxmann, GSTN advisory on the three-year bar on filing GST returns — https://www.taxmann.com/post/blog/gstn-advisory-on-filing-pending-gst-returns-before-three-year-expiry