Furthering The Ease of Doing Business Agenda

Building on momentum from earlier initiatives, Union Budget 2026-27 reinforces the government’s continuing efforts to advance Ease of Doing Business through several announcements aimed at greater emphasis on enabling trust-based framework, simplifying regulatory compliance, reducing litigation risks and enhancing certainty for industry.

During her Budget speech, the Finance Minister highlighted the extensive reform efforts undertaken since the Prime Minister’s Independence Day address in 2025, covering GST process simplification, labour code notifications, rationalisation of mandatory quality control registrations, etc. She further noted that the Centre has also been working closely with State governments to reduce compliance requirements and advance deregulation, underscoring a whole-of-government approach to improving the business environment.

By building upon last year’s regulatory reforms, the Budget further enhances the policy framework through targeted measures, especially the direct tax reforms and modernisation of customs procedures. These improvements translate recommendations into concrete measures, demonstrating both consistency and adaptability to stakeholder feedback. A key aspect of the 2026-27 Budget from the EoDB lens is the simplification of regulatory processes and enhancing dispute avoidance. New, simpler income tax rules and forms will be released soon, giving businesses enough time to adapt. Filing deadlines are being staggered to relieve pressure on non-audit cases and an automated system will let eligible taxpayers obtain lower or nil tax deduction certificates without needing to contact officials directly. Importantly, taxpayers shall now have the option to update returns even after reassessment has begun, reducing litigation.

The Budget reforms penalties and prosecutions under the Income Tax Act, reinforcing a trust-based and risk-oriented regulatory framework. Minor technical breaches, such as late audit reports or financial statements, will now attract fees instead of penalties, while several procedural offences shall be decriminalised. CII has been advocating for continuing the decriminalization of minor offences.

Further, Customs reform was another important area that saw the Budget’s efforts to improve the business environment. The government has set out plans to make customs operations more digital and user centric.

Overall, from the lens of ease of doing business, Budget 2026–27 provides a greater momentum to further make India’s business environment conducive and industry-friendly.

Note: This article was first published in The Hindu Business Line