Compliance burden
Also called: regulatory burden · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Class 9, Ch 9 "The Price Puzzle: What Drives the Market"
Meaning
Compliance burden is the time and money a business spends following rules. This includes getting licences and permits, filing returns and completing procedures. It hurts small firms most, because they cannot afford dedicated staff for paperwork. A heavy burden discourages investment, firm growth and jobs.
Example
An ORF-TeamLease study (2022) counted about 69,000 compliances and 26,000 clauses carrying imprisonment for businesses in India. To reduce this, the Jan Vishwas Act 2023 decriminalised 183 provisions in 42 Acts.
Don't confuse with
- Regulatory cholesterol: a term from the Economic Survey 2024-25 for the build-up of excessive and outdated rules. It is a main cause of the compliance burden. The compliance burden is the cost that firms actually bear.