States take up deregulation cause to improve ease of doing business: Economic Survey

States have seriously taken up the cause of deregulation at their level and have undertaken a substantial amount of work on this in the last one year, the Economic Survey 2025-26 noted.

The Survey, which was tabled in Parliament on January 29 by Union Finance Minister Nirmala Sitharaman, noted that the issue of deregulation by states to improve ease of doing business had been taken up in the last one year – both in the previous Survey as well as the Budget.

A total of 23 priority areas across five sectors including land, building and construction, labour, utilities and permissions and other overarching priorities were identified for states by the Task Force on Compliance Reduction and Deregulation under the Cabinet Secretary, of which 76% has already been completed.

“The scale of the reform effort reflects both its ambition and its execution discipline,” said the Survey. With 36 States and Union Territories expected to implement 23 Priority Areas each, the total number of actionable reforms across the country amounts to 828, it noted.

“As of January 23, 2026, 630 priority areas, representing 76% of the total, have already been implemented. Another 79 Priority Areas, accounting for 10%, are under active implementation," it said, adding that 14% have been identified as not applicable or not implementable by states.

The progress of these actions is monitored on a digital MIS platform that enables real-time monitoring, the identification of bottlenecks, and the dissemination of best practices, reinforced by regular high-level reviews and monthly monitoring by the Cabinet Secretariat.

Even beyond these priority areas, many states and UTs have undertaken innovative reforms that are tailored to their specific administrative, economic, and spatial contexts. “This demonstrates how the compliance reduction agenda has encouraged states to internalise deregulation as a continuous governance process rather than a checklist exercise,” said the Survey, adding that best practices emerging from states are documented through State-wise dockets and shared on the MIS portal, enabling peer learning and replication across jurisdictions. 

For instance, in Andhra Pradesh and Uttarakhand, the requirement for land conversion or change in land use has been eliminated for specific categories, significantly reducing procedural delays, the Survey pointed out. In Assam, Jammu and Kashmir, Odisha, Puducherry, and Tripura, negative lists have been introduced for mixed land use zones, whereby all activities are permitted unless explicitly prohibited, replacing earlier prescriptive zoning frameworks.

Several states have expanded the use of third-party inspections and self-certification to reduce regulatory bottlenecks. Chhattisgarh, Mizoram, Rajasthan, Tripura, and Uttar Pradesh have introduced third-party inspection mechanisms for building plan approvals, it further noted.