Policy Reforms That Transformed Business Environment

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 [S1][S3][S5].
• 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) [S1].
• 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 [S1].
• FY 2025-26 saw 55,200+ startups recognised — highest ever in a single year since Start-up India launch [S5].
• Jan Vishwas (Amendment of Provisions) Bill, 2025/2026 — second-generation decriminalisation pending in Parliament (PRS) — builds on 2023 Act [S2].

3. Background & Evolution

• 2014 — Make in India launched; EoDB push begins.
• 16 Jan 2016 — Start-up India Action Plan unveiled by DPIIT [S4][S5].
• 28 May 2016 — Insolvency & Bankruptcy Code, 2016 (Act 31 of 2016) enacted [S3].
• 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 [S4].
• 11 Aug 2023 — Jan Vishwas (Amendment of Provisions) Act, 2023 (Act 18 of 2023) — decriminalised 183 provisions across 42 Central Acts under 19 Ministries [S2].
• 2024-26 — CGSS guarantee ceiling doubled to ₹20 crore; Jan Vishwas 2.0 Bill (288 provisions / 16 Acts) tabled [S2][S4].

4. Core Static Facts

• Nodal Ministry/Dept: DPIIT (Ministry of Commerce & Industry) for Start-up India/CGSS [S4][S5]; IBBI under MCA for IBC [S3].
• Start-up India: Recognised startups 1,97,692 as of 31 Oct 2025 [S4]; 55,200+ recognised in FY 2025-26 [S5].
• 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 [S4].
• IBC, 2016: As of 31 Mar 2025, 1,194 companies resolved; creditors realised ₹3.89 lakh crore = >170% of liquidation value [S3]; 48% of bank recoveries in FY 2023-24 routed via IBC [S3].
• Jan Vishwas Act, 2023: 183 provisions / 42 Acts / 19 Ministries decriminalised [S2].
• MAT: Cut to 15% (Sept 2019); business registrations 1.55 → 1.98 lakh between FY21-FY26 [S1].

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 [S3]. - Tax certainty (MAT cut, faceless assessment) + CGSS unlocking collateral-free credit of up to ₹20 cr/startup [S4].

Legal / Constitutional - Jan Vishwas Act, 2023 replaces imprisonment with monetary penalties; introduces adjudicating officers & appellate authorities; mandates periodic 10% hike in penalties [S2]. - IBC consolidates earlier fragmented insolvency law (SICA, RDDBFI, SARFAESI overlaps).

Administrative / Governance - Shift from criminal-prosecution model to compounding & adjudication — relieves judicial pendency [S2]. - Trust-based customs, digital trade facilitation per Budget 2026-27 [S1].

Social / Equity - CGSS reduces collateral barrier — aids first-generation, women, tier-2/3 entrepreneurs [S4].

6. Recent Developments (last 12-18 months)

• 5 Mar 2026 — PIB Backgrounder consolidating EoDB reforms; Budget 2026-27 announces trust-based customs & reduced litigation [S1].
• FY 2025-26 — 55,200+ startups recognised, highest-ever [S5].
• 31 Oct 2025 — DPIIT cumulative recognised startups crossed 1.97 lakh [S4].
• 2025-26 — Jan Vishwas 2.0 Bill: 288 provisions across 16 Central Acts under 10 Ministries proposed for decriminalisation [S2].
• CGSS expansion notification (2025) — ceiling doubled to ₹20 crore [S4].

7. Prelims Hooks

• IBC, 2016 = Act No. 31 of 2016, enacted 28 May 2016 [S3].
• IBBI is the regulator under IBC, parent ministry MCA [S3].
• Jan Vishwas Act, 2023 = Act No. 18 of 2023; decriminalised 183 provisions / 42 Central Acts / 19 Ministries [S2].
• Start-up India launched 16 January 2016 by DPIIT, Ministry of Commerce & Industry [S4].
• CGSS operationalised 1 April 2023; implementing agency NCGTC Ltd [S4].
• CGSS guarantee ceiling per borrower: ₹20 crore (up from ₹10 cr) [S4].
• AGF under CGSS for 27 Champion Sectors: 1% p.a. (from 2%) [S4].
• IBC recoveries by FY24 banking: 48% share [S3].
• IBC realisation as % of liquidation value (Mar 2025): >170% [S3].
• Corporate MAT rate post-2019: 15% (down from 18.5%).
• Recognised startups as on 31 Oct 2025: 1,97,692 [S4].
• Business registrations 2020-21: 1.55 lakh → 2025-26: 1.98 lakh [S1].

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) [S2].
• 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 [S3].

11. Sources

• [S1] Policy Reforms That Transformed Business Environment — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2235433 — (tier: 1) — server returned 403 on fetch; facts taken from the excerpt supplied by user
• [S2] Lok Sabha passes Jan Vishwas (Amendment of Provisions) Bill, 2023 — https://www.pib.gov.in/PressReleasePage.aspx?PRID=1943393 ; PRS — https://prsindia.org/billtrack/the-jan-vishwas-amendment-of-provisions-bill-2025 — (tier: 1)
• [S3] IBC Boosts Ease of Doing Business; 1,194 companies resolved — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2157539 ; IBBI legal framework — https://ibbi.gov.in/legal-framework/act — (tier: 1)
• [S4] Expansion of Credit Guarantee Scheme for Startups (CGSS) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2127843 ; DPIIT recognises 1,97,692 startups — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2197662 — (tier: 1)
• [S5] 55,200+ startups recognised in FY 2025-26 — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2253019 — (tier: 1)