Building India’s New Business Framework
1. India recorded an approximate 27 percent increase in active registered companies, rising from 1.55 lakh in 2020–21 to 1.98 lakh in 2025–26 as on 3 February 2026.
2. The Union Budget 2026–27 proposed digital trade facilitation, tax certainty, reduced compliance burden, lower litigation, trust-based customs systems, and an investment-friendly tax regime to strengthen business conditions.
3. Institutional reforms highlighted include Startup India, credit guarantee schemes, and digital credit assessment models, all aimed at creating a transparent, technology-enabled, investor-friendly, and growth-oriented business ecosystem.
4. Regulatory reforms such as the Jan Vishwas Act, Insolvency and Bankruptcy Code, and MAT-related measures were designed to improve regulatory coherence, capacity-building, accountability, and trust-based governance.
5. Ease of Doing Business reforms were launched as part of a long-term government programme focused on making India more attractive for investment, enterprise formation, and sustained economic growth.
6. The Indian business ecosystem was described as stronger and more efficient, supported by reforms that empowered entrepreneurs, reduced procedural barriers, and expanded opportunities within a growth-oriented environment.
7. The RBI’s Business Expectations Index remained above the neutral benchmark of 100 through FY 2024–25 and into July–September quarter of FY 2025–26, indicating continued positive business sentiment.
8. Positive readings in the Business Expectations Index reflected confidence among firms regarding future output, employment generation, investment activity, demand conditions, and broader industrial growth prospects in India.
9. The government identified improvement of the business environment as a strategic priority to attract investment, stimulate enterprise, encourage innovation, and accelerate national economic growth through reform.
10. The reform approach focused on legislative and regulatory restructuring, streamlined procedures, and removal of redundant compliances to build a more transparent, efficient, predictable, and business-friendly ecosystem.
11. Ease of Doing Business now stands as a central pillar of India’s reform agenda, with sustained policy measures reinforcing investor confidence and improving India’s competitiveness as a business destination.
12. India’s reform-driven growth strategy emphasized entrepreneurship promotion, wider access to finance, modernization of regulatory frameworks, and stronger trade facilitation as key pillars of business ecosystem improvement.
13. Under Startup India, eligible companies can obtain DPIIT recognition and access tax incentives, simplified compliance procedures, fast-tracked intellectual property processing, and broader regulatory support mechanisms.
14. As of February 2026, India had over 2.16 lakh DPIIT-recognised startups, placing the country firmly among the world’s largest and most dynamic startup ecosystems globally.
15. Startup-related regulatory reforms initiated since 2016 were aimed at improving ease of doing business, easing capital raising, reducing compliance burden, and strengthening the broader startup ecosystem.
Must Know Terms :
1. JanVishwas
Jan Vishwas refers to the Jan Vishwas Amendment of Provisions Act 2023. It decriminalised 183 provisions across 42 Central Acts administered by 19 ministries and departments. The law replaced imprisonment for many minor technical or procedural defaults with monetary penalties and administrative action. Its main objective was to strengthen trust based governance and improve ease of living and business conditions in India.
2.DPIIT
DPIIT stands for the Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry. It handles Startup India recognition, industrial policy, investment facilitation, and several business reforms. DPIIT recognition allows eligible startups to access tax benefits, simpler compliance processes, and faster intellectual property support. The department also plays a central role in improving India’s investment and enterprise climate.
3.EoDB
EoDB means Ease of Doing Business. It refers to reforms that make starting, operating, and expanding businesses simpler, faster, and more predictable. In India, EoDB covers compliance reduction, digital approvals, contract enforcement, trade facilitation, and regulatory simplification. Recent measures linked with it include digital trade systems, tax certainty, reduced litigation, trust based customs administration, and a more investment friendly taxation framework.
4.IBC
IBC refers to the Insolvency and Bankruptcy Code 2016. It created a consolidated and time bound framework for insolvency resolution involving companies, partnership firms, and individuals. The Code aims at maximising asset value, improving credit discipline, and balancing stakeholder interests. It introduced a creditor in control model for corporate insolvency and established the Insolvency and Bankruptcy Board of India as the main regulator.
5.MAT
MAT means Minimum Alternate Tax under Section 115JB of the Income Tax Act. It applies when a company’s normal tax liability is lower than the prescribed share of its book profits. For domestic companies, MAT is generally charged at 15 percent of book profit, along with applicable surcharge and cess. Certain International Financial Services Centre units receive a concessional MAT rate of 9 percent.
6.ICEGATE
ICEGATE stands for Indian Customs Electronic Gateway. It is the national electronic portal of Indian Customs under the Central Board of Indirect Taxes and Customs. The platform provides online filing and transaction services for importers, exporters, customs brokers, shipping lines, airlines, and other trade users. It supports customs documentation, electronic payments, refunds, user registration, and digital exchange of trade related customs messages.
MCQ
1. The approximate increase in active registered companies in India between 2020–21 and 2025–26 was:
A) 18 percent
B) 22 percent
C) 27 percent
D) 31 percent
2. The number of active registered companies rose from 1.55 lakh in 2020–21 to:
A) 1.78 lakh
B) 1.98 lakh
C) 2.08 lakh
D) 2.16 lakh
3. The data on active registered companies for 2025–26 was stated as on:
A) 1 January 2026
B) 31 March 2026
C) 3 February 2026
D) 5 March 2026
4. The Union Budget 2026–27 proposed all of the following except:
A) Digital trade facilitation
B) Tax certainty
C) Reduced compliance burden
D) Universal corporate tax exemption
5. Trust-based customs systems were mentioned in the text as part of:
A) RBI monetary policy reforms
B) Labour code revisions
C) Union Budget 2026–27 business measures
D) State industrial corridor plans
6. Which set of reforms was highlighted as institutional reforms strengthening the business ecosystem?
A) Startup India, credit guarantee schemes, digital credit assessment models
B) PMGSY, Jal Jeevan Mission, Smart Cities Mission
C) National Education Policy, ULLAS, SWAYAM
D) Ayushman Bharat, PMAY, Mission Indradhanush
7. Regulatory reforms mentioned in the passage include Jan Vishwas Act, IBC, and:
A) FEMA
B) GSTN
C) FRBM
D) MAT related measures
8. The main purpose of Ease of Doing Business reforms was to make India more attractive for:
A) Military alliances
B) Investment and enterprise formation
C) Population redistribution
D) Import substitution alone
9. The RBI’s Business Expectations Index remained above the neutral benchmark of:
A) 80
B) 90
C) 100
D) 110
10. The Business Expectations Index stayed above the neutral benchmark through FY 2024–25 and into:
A) Q1 of FY 2026–27
B) Q2 of FY 2025–26
C) Q4 of FY 2023–24
D) Q3 of FY 2026–27
11. Positive readings in the Business Expectations Index reflected confidence regarding:
A) Output, employment, investment, and demand
B) Rainfall, inflation, monsoon, and exports only
C) Imports, tourism, and remittances only
D) Defence production alone
12. The reform approach specifically focused on:
A) Nationalisation of private firms
B) Limiting foreign participation in services
C) Legislative and regulatory restructuring with removal of redundant compliances
D) Replacing digital systems with offline clearances
13. Under Startup India, eligible companies can obtain recognition from:
A) RBI
B) SEBI
C) NITI Aayog
D) DPIIT
14. As of February 2026, the number of DPIIT recognised startups in India was:
A) Over 1.25 lakh
B) Over 1.75 lakh
C) Over 2.16 lakh
D) Over 3.10 lakh
15. Startup related regulatory reforms initiated since 2016 were aimed at all of the following except:
A) Improving ease of doing business
B) Easing capital raising
C) Reducing compliance burden
D) Restricting the startup ecosystem
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