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The Department for Promotion of Industry and Internal Trade says it is shifting India from permission-based to trust-based regulation, reporting on 27 October 2026 that 2,50,046 start-ups are recognised, 47,957 compliances were reduced and 900 provisions of central laws were decriminalised, with 22-language digital single-window clearances.
What did DPIIT announce?
The Department for Promotion of Industry and Internal Trade (DPIIT) says it is moving from a permission-based to a trust-based regulatory framework, with reforms in the start-up ecosystem, compliance reduction, sector regulation, foreign direct investment and single-window approvals. A PIB release of 27 October 2026 reports progress in setting up businesses, jobs, investment and digital services.
The reforms are meant to reduce the regulatory burden on business. The release gives numbers on start-ups, credit guarantees, deregulation and clearances, summarised below.
What are the key numbers?
| Indicator | Figure |
|---|---|
| Start-ups recognised | 2,50,046 |
| Jobs reported in start-ups | 25.42 lakh |
| District coverage | More than 770 |
| Start-ups outside metros | 52 percent |
| Start-ups with a woman director | 48 percent |
| Seed fund approved | 775.67 crore rupees |
| Credit guarantee on 532 loans | 1,662.71 crore rupees |
| Compliances reduced | 47,957 |
| Provisions decriminalised | 900 |
| Regulatory reforms for start-ups | 63 |
Of the 47,957 compliances reduced, 22,290 were digitised, 16,141 simplified, 5,255 decriminalised and 4,271 eliminated. The 900 provisions decriminalised through the Jan Vishwas Acts include 183 provisions of 42 Acts in 2023 and 717 provisions of 79 Acts in 2026.
Why is this significant?
- Ease of doing business: fewer compliances and decriminalisation cut regulatory risk for firms.
- Inclusion: 52 percent of start-ups are outside metros and 48 percent have a woman director.
- Finance: the guarantee limit per borrower rose from 10 crore rupees to 20 crore rupees, and the annual fee for 27 champion sectors fell to 1 percent.
- Investment: the release reports 843 billion dollars of FDI in 12 years and automatic route expansion in 17 sectors.
What are the issues and challenges?
- Uneven state action: states implemented over 9,700 reforms across seven editions of the Business Reform Action Plan, yet district-level reform covers 222 reforms so far.
- Labour transition: 29 central labour laws were merged into four codes, so awareness and compliance support are needed.
- Trust with safeguards: decriminalisation must keep adequate deterrence for serious violations.
- Reach: GeM registration of start-ups rose from 7,929 in January 2021 to 43,260, but access beyond tier 2 and tier 3 cities needs sustained effort.
| Item | Earlier | Now |
|---|---|---|
| Prior permission for layoff or closure | 100 workers | 300 workers |
| Factory applicability, with power | 10 workers | 20 workers |
| Factory applicability, without power | 20 workers | 40 workers |
| Contract labour licence | 20 workers | 50 workers |
| PESO licence validity | 5 years | 10 years |
What is the way forward?
- Continue the shift to trust-based regulation through the Jan Vishwas Acts and further decriminalisation.
- Deepen the Business Reform Action Plan at district level, covering collectorates, development authorities and urban local bodies.
- Expand the National Single Window System, now available in 22 languages, with digital integration of regulators such as PESO.
- Support start-ups through the Fund of Funds, seed fund and credit guarantee, extending to tier 2 and tier 3 cities.
What is the Uttar Pradesh dimension?
The release names no Uttar Pradesh figure. The state link is that business reforms are implemented by states through the Business Reform Action Plan, which reaches district collectorates, development authorities and urban local bodies. Uttar Pradesh's start-up policy and state single-window system, Nivesh Mitra, are the state counterparts of these national measures and relevant to GS-V on economy and governance. Cite the UP Industrial Development Department for any state number.
Answer-ready kit
- Intro hook: India is moving from asking permission to building trust in business regulation.
- Value add 1: 47,957 compliances reduced and 900 provisions decriminalised.
- Value add 2: 2,50,046 recognised start-ups, 52 percent outside metros.
- Value add 3: 29 central labour laws merged into four codes.
- Conclusion: Trust-based governance works when simplification is matched by safeguards and state-level delivery.
Key Terms
- Trust-based governance
- Regulation that presumes good faith and reduces prior permissions.
- Decriminalisation
- Removing criminal penalties for minor, procedural violations.
- Jan Vishwas Acts
- Laws that decriminalise provisions of central Acts.
- Business Reform Action Plan
- State-level ease of doing business reform programme.
- National Single Window System
- Digital platform for business approvals.
- Fund of Funds for Start-ups
- SIDBI-managed commitment to alternative investment funds.
UPPSC syllabus: GS-II, GS-III, GS-V
Sources: PIB Press Release: DPIIT promotes trust-based governance
Last verified: 2026-10-28
