Businesses in India are still being forced to comply with outdated approval processes and demands from local officials despite multiple ease-of-doing-business reforms announced by governments, according to a recent industry body report.The report highlighted a persistent disconnect between policy announcements and implementation on the ground.
“The result is that businesses simply comply with what the official in front of them demands, regardless of what the law or policy actually requires. The reform exists on paper; the burden remains in practice,” the Assocham report titled Ease of Doing Business in India: The Path to Viksit Bharat said.
While the report acknowledged and appreciated several initiatives undertaken by authorities and noted that progress on ease of doing business in India is real, it cautioned against overlooking the significant challenges that still remain at the ground level.It noted that reforms introduced at the national level often take months or even years to translate into practical change. Although several states and central agencies have announced simplified approval systems, reduced compliance requirements and single-window mechanisms, businesses frequently continue to face the old processes, delays and administrative hurdles.According to the report, many single-window portals introduced by states function largely as tracking interfaces rather than genuine single-point clearance systems. Investors still have to coordinate with multiple departments and officials, while the complete list of required approvals often remains unclear at the outset.Nagesh Basavanhalli, Founder, Peak15 Advisors, said, “The opportunity now lies in greater alignment between central and state systems, faster digitisation of approvals, and more consistent implementation frameworks. Businesses are not necessarily seeking fewer regulations; they are seeking predictability and transparency. It will significantly strengthen investor confidence.”The report also pointed to implementation gaps caused by outdated digital systems. In several cases, technology platforms meant to enable reformed procedures have not been updated, leaving officials without any operational mechanism to implement new rules even after reforms have been formally notified.It added that local administrative practices often continue unchanged due to habit, informal expectations and a lack of accountability for failing to adopt the new regime.
The report identified environmental clearance norms for building and construction projects as one example of unresolved bottlenecks.Under current rules, environmental clearance is required for projects with a built-up area exceeding 20,000 square metres, including commercial buildings, warehouses and mixed-use developments with relatively low pollution potential.According to the report, this has encouraged investors to deliberately scale down projects to remain below the approval threshold.It recommended adopting a risk-based approach that calibrates the intensity of environmental scrutiny according to actual pollution potential instead of relying solely on project size.The report further warned that even as some regulations are being simplified, new rules continue to accumulate across sectors.Without regular reviews and proportionality checks, the overall regulatory burden could continue rising despite ongoing ease-of-doing-business efforts, it said.The report recommended that governments at both the Centre and state levels institutionalise continuous consultations with industry not only during the drafting of regulations but also during implementation and review stages.Also Read: National Single Window System for ease of doing business takes off as 16 states onboard portalIt said this would help policymakers better understand the real-world impact of regulations and identify operational bottlenecks more effectively.The report also called for stronger implementation of third-party inspection systems through proper empanelment of accredited professionals and clearer guidelines on which inspections can be outsourced, under what conditions, and the legal validity of third-party certifications.Also Read: Google I/O 2026: What to expect, when and how to watch the tech event
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