If the latest annual economic survey is a hint, then budget 2025 may attempt deregulation at scale. Deregulation is used to describe the reducing or eliminating government interference or control over one or more industries.

“Getting out of the way and allowing businesses to focus on their core mission is a significant contribution that governments around the country can make to foster innovation and enhance competitiveness,” India’s chief economic advisor Anantha Nageswaran recommended in the Economic Survey tabled a day ahead of Finance Minister’s Nirmala Sitharaman’s big budget speech on February 1.

The Narendra Modi administration has been keen on improving the ease of doing business in India and the latest thrust for deregulation may be another step in the same direction. The country ranks 63 in the world, up significantly from 142 in 2014, in the World Bank’s ease of doing business ranking.

However, Nageswaran may be implying that the onus is on the state governments, and not the centre, for the next round of reforms to improve ease of doing business in India.

For example, Indian states require factories with a 10,000 square metre plot to forgo between 1,164 to 3,522 square metres of land for setbacks. As a result, setback regulations cost Indian factories the productive value of land valued up to ₹97.5 lakh and the opportunity to create up to 521 jobs. This is not to argue that setbacks are to be done away with but to make the case that

regulation must reckon with the deadweight loss and the opportunity cost of every such imposition, the survey added.

“It has been pointed out many times, 60,000 odd compliances on the labor front alone by the industry. So that is fair. But the point is that in the context of Budget, these don’t amount too much. What does the Budget do about it? I think this is what the government need to do for the entire year,” former Finance Secretary Subhash Garg said.

“Deregulation is a music to my ears. I really like it, not only for labor reforms, which central government has been working… whether it is an insurance sector or whether it is a banking sector, or whether it is electricity sector, there is lot of prescriptive regulation, which needs to slowly go away. It cannot happen overnight,” said Atanu Chakraborty, former secretary at the Department of Economic Affairs and Part-Time Chairman and Independent Director at HDFC Bank.