India’s transition towards a facilitation-driven business ecosystem through digital governance, regulatory simplification, and trust-based administration, significantly improving the Ease of Doing Business.
- In 2016, only 502 startups were recognised, creating 308 direct jobs. However, by March 2026, over 2.23 lakh startups have been recognised, generating 23.3 lakh direct jobs.
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What is Ease of Doing Business (EoDB)?
- Ease of Doing Business (EoDB) refers to the extent to which the regulatory, administrative, and legal environment of a country facilitates the establishment, operation, and expansion of businesses with minimum cost, time, and procedural hurdles.
- It measures how easily entrepreneurs and firms can:
- Start a business,
- Obtain permits and licenses,
- Access credit,
- Register property,
- Pay taxes,
- Enforce contracts,
- Conduct trade, and
- Resolve insolvency.
Indicators of India’s Improving Business Environment (UPSC CSE 2016)
- World Bank Doing Business Report: India’s rank improved from 142 (2014) to 63 (2019), reflecting substantial progress in regulatory simplification and business facilitation.
- The World Bank’s Doing Business report was officially discontinued in September 2021 following an internal investigation that revealed data irregularities and ethical breaches.
- It has been fully replaced by a new flagship project called Business Ready (B-Ready)
- IMD World Competitiveness Ranking 2025: India’s ranking improved from 43rd (2021) to 41st (2025), indicating stronger governance, business efficiency, and infrastructure development.
- World Bank GovTech Maturity Index: India consistently remained in Group A (2020, 2022, 2025), demonstrating advanced digital governance and innovative public service delivery systems.
- UN E-Government Survey: India secured high scores in the Online Services Index, Telecommunication Infrastructure Index, and Human Capital Index, highlighting robust digital public infrastructure and citizen-centric governance.
Key Reforms Undertaken
- Startup India: Launched in January 2016, the Startup India initiative aims to support entrepreneurs and build a robust startup ecosystem.
- It seeks to transform India into a nation of job creators rather than job seekers. Support measures include the Seed Fund, Fund of Funds, investor connect portal, and a credit guarantee scheme.
- Simplified Business Registration: Platforms such as SPICe+ and Udyam Registration have enabled paperless, integrated, and time-bound business incorporation processes.
- MCA21: MCA Version 3 was launched in FY 2021-22 and integrates advanced features like e-Scrutiny, e-adjudication and e-consultation. It also includes Compliance Management System and MCA Lab.
From 2021 to 2025, a total of approximately 3.84 crore filings were made. Of these 3.33 crore filings were approved through Straight Through Process.
- Udyam Registration Portal: Udyam Registration Portal was introduced in July 2020. It offers a free, paperless, and self-declaration-based system for MSMEs (Micro, Small and Medium Enterprises).
- MSME registrations on the Udyam Portal increased from 10.02 thousand in October 2020 to over 858 thousand by 5 June 2026.
- PARIVESH (Pro-Active and Responsive Facilitation by Interactive, Virtuous, and Environmental Single Window Hub) 2.0: It aims to streamline Environment clearance (EC), Forest clearance (FC), Wildlife (WL) and Coastal Regulation Zone (CRZ) clearances.
- As a result, the average time for environmental clearance approval reduced to 64 days in 2025-26, against the stipulated timeline of 105 days.
- GeM (Government e-Marketplace): GeM was introduced in 2016 to digitise and make public procurement more streamlined and inclusive.
- GeM has achieved a cumulative Gross Merchandise Value (GMV) of ₹18.4 lakh crore, including crossing ₹5 lakh crore GMV in the financial year 2025–26.
- Digital India Land Records Modernization Programme (DILRMP): DILRMP was launched in 2016 to modernize the management of land records and minimize the scope of land/property disputes.
Achievements
- Higher Investor Confidence: Policy stability, regulatory simplification, and improved ease of doing business have strengthened investor trust in the Indian economy.
- India received over USD 1 trillion in cumulative FDI inflows (2000–2025).
- Annual FDI inflows increased from around USD 36 billion in 2013-14 to over USD 80 billion in recent years.
- India continues to remain among the top global destinations for greenfield investments.
- Growth of Startups and MSMEs: Improved access to finance, simplified registration processes, and supportive policies have accelerated entrepreneurial growth.
- Recognised startups increased from 502 in 2016 to over 2.23 lakh by March 2026.
- Startups generated 23.3 lakh direct jobs.
- MSME registrations on the Udyam Portal increased from 10,000 (2020) to over 8.58 lakh registrations annually by 2026.
- Nearly 48% of recognised startups have at least one woman director or partner.
- Expansion of Digital Economy: The widespread adoption of Digital Public Infrastructure (DPI) has enhanced efficiency, transparency, and financial inclusion.
- UPI transactions increased from 2 crore transactions in FY 2016-17 to over 24,162 crore transactions in FY 2025-26.
- UPI transaction value rose from ₹0.07 lakh crore to around ₹314 lakh crore during the same period.
- UPI is used by 540 million+ individuals and 100 million merchants.
- Enhanced Tax Compliance and Formalisation
- GST taxpayers increased from around 60 lakh in 2017 to over 1.64 crore in 2026.
- The GST Network processed over ₹107.64 lakh crore in payments by April 2026.
- E-Way Bill generation increased from 15.74 crore (2018-19) to 188.27 crore (2025-26).
- Improved Logistics and Market Connectivity: Infrastructure and logistics reforms have reduced transaction costs and improved supply-chain efficiency.
- India’s rank in the World Bank Logistics Performance Index improved from 54th (2014) to 38th (2023).
- GeM achieved a cumulative Gross Merchandise Value (GMV) of ₹18.4 lakh crore.
- ONDC has expanded to 616+ cities with over 7.64 lakh sellers on the network.
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Challenges
- Inter-State Regulatory Variations: Uneven implementation of reforms across states creates compliance uncertainty, as businesses face differing procedures for land approvals, labour regulations, and local clearances despite national-level reforms.
- Contract Enforcement Issues: Judicial delays and case pendency increase transaction costs and reduce investor confidence; over 5 crore cases remain pending across Indian courts, affecting timely dispute resolution.
- Land Acquisition Bottlenecks: Complex acquisition procedures and ownership disputes continue to delay industrial and infrastructure projects, increasing project costs and implementation timelines.
- Infrastructure Gaps: High logistics costs and inadequate connectivity in rural and backward regions reduce competitiveness; logistics costs in India remain around 13–14% of GDP, higher than many developed economies.
- Digital Readiness of MSMEs: Limited digital literacy and technological adoption among micro and small enterprises constrain effective utilization of GST, e-invoicing, ONDC, and other digital compliance platforms.
- Access to Timely Credit: Despite policy interventions, many MSMEs face financing constraints due to limited collateral, high perceived risks, and dependence on informal credit channels.
- Regulatory Overlaps: Multiple approvals from different authorities often result in duplication, compliance burden, and delays, particularly in sectors such as construction, manufacturing, and mining.
Way Forward
- Strengthen Cooperative Federalism: Greater harmonisation of state-level regulations can create a more uniform and predictable business environment.
- Accelerate Judicial Reforms: Dedicated commercial courts and faster dispute resolution mechanisms can improve contract enforcement.
- Deepen Digital Governance: Expanding integrated digital platforms can further reduce compliance burden and administrative delays.
- Enhance Logistics Efficiency: Investments in multimodal transport and supply-chain infrastructure can reduce transaction costs and improve competitiveness.
- Promote Trust-Based Regulation: Further decriminalisation of minor offences and rationalisation of compliances can foster a more business-friendly ecosystem.
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Conclusion
India’s Ease of Doing Business reforms reflect a paradigm shift from regulatory control to facilitative governance. Sustained efforts in digitalisation, compliance reduction, and institutional reforms will be crucial in transforming India into a globally competitive investment destination and realizing the vision of Viksit Bharat 2047.
8 Jun 2026
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