New Delhi: A year since the task force on deregulation led by cabinet secretary T. V. Somanathan started work to reduce compliance burden across 23 priority areas, several states and UTs—buoyed by the results—have undertaken innovative reforms that go beyond the identified template and are tailored to their specific administrative and economic contexts, the Economic Survey 2026 has said.
For instance, Andhra Pradesh and Uttarakhand have done away with the requirement for land conversion or change in land use for specific categories, significantly reducing procedural delays.
Assam, Jammu and Kashmir, Odisha, Puducherry, and Tripura have introduced negative lists for mixed land use zones, whereby all activities are permitted unless explicitly prohibited, replacing earlier prescriptive zoning frameworks. This has enabled greater flexibility in land use while maintaining regulatory clarity.
Similarly, in the area of building and development norms, Haryana, Madhya Pradesh, Odisha, Tamil Nadu, Uttar Pradesh, and Uttarakhand have liberalised building bye-laws, and simplified development norms relating to setbacks, floor area ratio, parking restrictions, and minimum plot area.
These measures, the Economic Survey noted, have reduced land loss, enabled higher utilisation of urban land, and facilitated project execution, particularly for industrial and commercial developments.
Over a dozen states and UTs have also expanded the use of third-party inspections and self-certification to reduce regulatory bottlenecks.
Chhattisgarh, Mizoram, Rajasthan,Tripura and Uttar Pradesh have introduced third-party inspection mechanisms for building plan approvals. For environmental clearances, Andaman & Nicobar Islands, Andhra Pradesh, Goa, Tamil Nadu and Uttarakhand have enabled self-certification and third-party certification for consent to operate, reducing dependence on routine departmental inspections.
Bihar, Gujarat, Odisha, Maharashtra and Telangana have initiated labour reforms much before the notification of the four labour codes by the Centre last month, removing restrictions on women working in a wider range of industries and commercial establishments.
Assam, Odisha, Telangana and Tripura have streamlined fire safety regulations through the use of accredited third parties.
“This demonstrates how the compliance reduction agenda has encouraged states to internalise deregulation as a continuous governance process rather than a checklist exercise,” the Economic Survey said.
The Centre had set up the Task Force on Compliance Reduction and Deregulation last January to drive reforms that simplify regulations and streamline procedures across states and UTs.
This month, the T. V. Somnathan-led taskforce has rolled out the second phase of the deregulation exercise across 36 states and UTs to cover additional priority areas, including land, building and construction, utilities and permissions, environment, education, health, labour, and overarching reforms.
What happened in Phase I
In Phase-I launched January 2025, the Centre had identified 23 priority areas across five broad sectors in the 36 states and UTs, where it had set out to reduce procedural complexity without diluting legitimate safeguards.
The sectors include land use, building and construction, labour, utilities and permissions, and a set of overarching priorities. The task force had identified 828 actionable reforms across the 23 priority areas picked out by it.
The Economic Survey noted that as on 23 January, 630 actionable reforms, representing 76 per cent of the total, have already been implemented. Another 79 reforms, accounting for 10 per cent, are under active implementation.
The priority areas were identified through extensive consultations with central ministries, states, industry associations, and knowledge partners.
The idea was to identify redundant, overlapping, or outdated compliances and recommend their rationalisation; guiding states in amending laws, subordinate legislations, and procedures to align with principles of minimal regulation; encouraging adoption of standardised reform templates to promote consistency and predictability across jurisdictions; facilitating risk-based compliance frameworks and third-party involvement in inspections especially for micro, small, and medium enterprises among others.
The Economic Survey noted that the outcomes of the compliance reduction and deregulation initiative are visible in reduced compliance burdens, faster approvals, greater reliance on digital processes, and improved predictability for businesses.
“More importantly, the initiative demonstrates how deregulation, when pursued as a continuous governance process rather than a one-off exercise, strengthens state capacity itself. By lowering friction at the interface between firms and the state, administrative energy is redirected from routine policing towards coordination, monitoring, and problem-solving,” the survey said.
(Edited by Viny Mishra)
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