·PIB

Policy Reforms That Transformed Business Environment

In this note
  1. At a Glance
  2. Why in the News
  3. Background & Evolution
  4. Core Static Facts
  5. Multi-Dimensional Analysis
  6. Recent Developments (last 12-18 months)
  7. Prelims Hooks
  8. Mains Relevance
  9. Related Topics to Study Next
  10. Common Errors / Trap Areas

1. At a Glance

  • Cluster of post-2014 reforms — IBC, GST, MAT cut, Jan Vishwas, Start-up India, CGSS, digital filings — aimed at moving India from a permission-raj to a trust-based, tech-enabled business regime [1][3][5].
  • PIB Backgrounder (5 Mar 2026) records business registrations rising ~27% from 1.55 lakh (2020-21) to 1.98 lakh (2025-26, up to 3 Feb 2026) [1].
  • Examinable for Prelims (schemes, Acts, numbers) and Mains GS-II/III (governance, industrial policy, EoDB).

2. Why in the News

  • PIB Backgrounder dated 5 Mar 2026 consolidating the reform story alongside Union Budget 2026-27 measures on digital trade facilitation, tax certainty, trust-based customs, reduced litigation [1].
  • FY 2025-26 saw 55,200+ startups recognised — highest ever in a single year since Start-up India launch [5].
  • Jan Vishwas (Amendment of Provisions) Bill, 2025/2026 — second-generation decriminalisation pending in Parliament (PRS) — builds on 2023 Act [2].

3. Background & Evolution

  • 2014 — Make in India launched; EoDB push begins.
  • 16 Jan 2016 — Start-up India Action Plan unveiled by DPIIT [4][5].
  • 28 May 2016 — Insolvency & Bankruptcy Code, 2016 (Act 31 of 2016) enacted [3].
  • 1 July 2017 — GST rollout.
  • Sept 2019 — Corporate tax slashed to 22% (15% for new manufacturers); MAT reduced from 18.5% to 15%.
  • 2020 — Decriminalisation of cheque bouncing & other minor offences proposed.
  • 1 Apr 2023 — Credit Guarantee Scheme for Startups (CGSS) operationalised by NCGTC [4].
  • 11 Aug 2023 — Jan Vishwas (Amendment of Provisions) Act, 2023 (Act 18 of 2023) — decriminalised 183 provisions across 42 Central Acts under 19 Ministries [2].
  • 2024-26 — CGSS guarantee ceiling doubled to ₹20 crore; Jan Vishwas 2.0 Bill (288 provisions / 16 Acts) tabled [2][4].

4. Core Static Facts

  • Nodal Ministry/Dept: DPIIT (Ministry of Commerce & Industry) for Start-up India/CGSS [4][5]; IBBI under MCA for IBC [3].
  • Start-up India: Recognised startups 1,97,692 as of 31 Oct 2025 [4]; 55,200+ recognised in FY 2025-26 [5].
  • CGSS: Guarantee cover ceiling raised from ₹10 cr → ₹20 cr per borrower; 85% cover up to ₹10 cr default, 75% beyond; AGF cut from 2% → 1% for 27 Champion Sectors; 410+ loans worth ₹1,250+ cr guaranteed by end FY 2025-26 [4].
  • IBC, 2016: As of 31 Mar 2025, 1,194 companies resolved; creditors realised ₹3.89 lakh crore = >170% of liquidation value [3]; 48% of bank recoveries in FY 2023-24 routed via IBC [3].
  • Jan Vishwas Act, 2023: 183 provisions / 42 Acts / 19 Ministries decriminalised [2].
  • MAT: Cut to 15% (Sept 2019); business registrations 1.55 → 1.98 lakh between FY21-FY26 [1].

5. Multi-Dimensional Analysis

Economic

  • IBC raised India's 'Resolving Insolvency' rank by 84 places in World Bank EoDB; recovery rate rose 26.5 → 71.6 cents/$, time taken 4.3 → 1.6 years [3].
  • Tax certainty (MAT cut, faceless assessment) + CGSS unlocking collateral-free credit of up to ₹20 cr/startup [4].

Legal / Constitutional

  • Jan Vishwas Act, 2023 replaces imprisonment with monetary penalties; introduces adjudicating officers & appellate authorities; mandates periodic 10% hike in penalties [2].
  • IBC consolidates earlier fragmented insolvency law (SICA, RDDBFI, SARFAESI overlaps).

Administrative / Governance

  • Shift from criminal-prosecution model to compounding & adjudication — relieves judicial pendency [2].
  • Trust-based customs, digital trade facilitation per Budget 2026-27 [1].

Social / Equity

  • CGSS reduces collateral barrier — aids first-generation, women, tier-2/3 entrepreneurs [4].

6. Recent Developments (last 12-18 months)

  • 5 Mar 2026 — PIB Backgrounder consolidating EoDB reforms; Budget 2026-27 announces trust-based customs & reduced litigation [1].
  • FY 2025-26 — 55,200+ startups recognised, highest-ever [5].
  • 31 Oct 2025 — DPIIT cumulative recognised startups crossed 1.97 lakh [4].
  • 2025-26 — Jan Vishwas 2.0 Bill: 288 provisions across 16 Central Acts under 10 Ministries proposed for decriminalisation [2].
  • CGSS expansion notification (2025) — ceiling doubled to ₹20 crore [4].

7. Prelims Hooks

  • IBC, 2016 = Act No. 31 of 2016, enacted 28 May 2016 [3].
  • IBBI is the regulator under IBC, parent ministry MCA [3].
  • Jan Vishwas Act, 2023 = Act No. 18 of 2023; decriminalised 183 provisions / 42 Central Acts / 19 Ministries [2].
  • Start-up India launched 16 January 2016 by DPIIT, Ministry of Commerce & Industry [4].
  • CGSS operationalised 1 April 2023; implementing agency NCGTC Ltd [4].
  • CGSS guarantee ceiling per borrower: ₹20 crore (up from ₹10 cr) [4].
  • AGF under CGSS for 27 Champion Sectors: 1% p.a. (from 2%) [4].
  • IBC recoveries by FY24 banking: 48% share [3].
  • IBC realisation as % of liquidation value (Mar 2025): >170% [3].
  • Corporate MAT rate post-2019: 15% (down from 18.5%).
  • Recognised startups as on 31 Oct 2025: 1,97,692 [4].
  • Business registrations 2020-21: 1.55 lakh → 2025-26: 1.98 lakh [1].

8. Mains Relevance

  • GS-II: Government policies and interventions for development in various sectors.
  • GS-III: Indian Economy — growth, development, employment; Investment models; Industrial policy.
  • Likely stems: 1. "Discuss how the Jan Vishwas Act, 2023 marks a paradigm shift from a 'permission-raj' to a 'trust-based' regulatory regime." (GS-II/III) 2. "Examine the role of the IBC, 2016 in improving credit discipline and ease of doing business in India." (GS-III) 3. "Critically evaluate the contribution of Start-up India and CGSS in fostering a competitive entrepreneurial ecosystem." (GS-III)

9. Related Topics to Study Next

  • GST regime & GST Council — pillar of indirect-tax reform.
  • PLI Schemes (14 sectors) — complements EoDB on the manufacturing side.
  • National Single Window System (NSWS) — one-stop clearance platform.
  • Faceless Assessment & Vivad se Vishwas — tax-litigation reduction.
  • Companies (Amendment) Acts, 2019/2020 — decriminalised CSR & filing defaults.
  • Atmanirbhar Bharat Abhiyan — broader self-reliance umbrella.
  • World Bank B-READY (successor to EoDB) — new ranking framework.
  • DPI stack (Aadhaar, UPI, DigiLocker) — backbone of digital trade facilitation.

10. Common Errors / Trap Areas

  • IBC nodal regulator = IBBI under MCA, NOT RBI or SEBI.
  • Start-up India / CGSS sit under DPIIT (Commerce Ministry), NOT MSME Ministry — distinct from CGTMSE (which is MSME's).
  • Jan Vishwas Act = 2023 (183 provisions / 42 Acts) — do not confuse with the 2025/2026 Jan Vishwas 2.0 Bill (288 provisions / 16 Acts) [2].
  • MAT is on book profits of companies; cut to 15% in Sept 2019, not in Budget 2020.
  • IBC's improvement was in 'Resolving Insolvency' indicator, not overall EoDB rank alone [3].

Sources

  1. 1Policy Reforms That Transformed Business Environment — server returned 403 on fetch; facts taken from the excerpt supplied by userpib.gov.in · tier 1
  2. 2Lok Sabha passes Jan Vishwas (Amendment of Provisions) Bill, 2023 — PRSpib.gov.in · tier 1
  3. 3IBC Boosts Ease of Doing Business; 1,194 companies resolved — IBBI legal frameworkpib.gov.in · tier 1
  4. 4Expansion of Credit Guarantee Scheme for Startups (CGSS) — DPIIT recognises 1,97,692 startupspib.gov.in · tier 1
  5. 555,200+ startups recognised in FY 2025-26pib.gov.in · tier 1

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