A high-level committee of NITI Aayog, led by former Cabinet Secretary Rajiv Gauba, has submitted a bold set of recommendations that, if implemented, would reshape India’s regulatory landscape scrapping routine licences, permits and NoCs, ending the much-criticized “inspector raj”, and shifting compliance checks to accredited third parties.
The proposals form the core of a “trust-based” regulatory philosophy described by the panel as Jan Vishwas Siddhant signalling a move away from a permission- and penalty-heavy regime toward greater simplicity, transparency and ease of doing business.
What the panel recommends
Minimum prior-approval regime. Licensing and compliance requirements should be risk-graded and proportionate. Prior approvals (licenses, permits, NOCs) should be required only for activities that pose a material risk to national security, public safety, human health, environment, or involve significant public interest and only if such requirements are explicitly mandated by statute. Activities not explicitly prohibited should be free from prior permission.
Self-registration, not approval. For purposes such as database-maintenance or record-keeping, self-registration with minimal documentation should replace approval-based registration. Where licences or permits are still needed, they should ordinarily be granted indefinitely; in exceptional cases (e.g. public safety), validity may be limited to 5–10 years.
End of “inspector raj.” Routine inspections will no longer be conducted by government officers. Instead, inspections will be based on computer-assisted randomised selection and risk assessments, and carried out by accredited third-party agencies whose selection criteria and performance evaluations will be publicly disclosed.
Predictable regulatory updates. Instead of abrupt announcements, amendments to regulations would follow a fixed annual calendar. New rules or changes will be subject to stakeholder consultation and implemented only after giving adequate lead time unless urgent reasons demand otherwise.
Regulatory impact assessments (RIA). All existing and future regulations are to be reviewed for compliance costs on businesses as well as enforcement costs on government. A formal RIA framework with clear implementation timelines will be established.
Decriminalisation of minor technical offences. The committee recommends removing criminal penalties for minor procedural or technical violations. Imprisonment or fines should be reserved for serious offences those involving threats to public security, human health, fraud, or irreversible environmental harm. Penalties should be proportionate to the offence’s severity.
Digital compliance and data-sharing across departments. All regulatory filings will be digital, and ministries must ensure interoperability of databases. Information submitted once should not need to be re-filed; common APIs between departments will be encouraged for seamless data exchange.
In short, the aim is to build a regulatory architecture rooted in trust, efficiency and transparency reducing friction for citizens and businesses while preserving safeguards only where strictly necessary.
Wider context: Why the overhaul
In recent years, the proliferation of regulatory requirements in India including licences, NoCs, permits, and mandatory standards has been widely criticised for creating delays, increasing costs, discouraging entrepreneurship, and hindering competitiveness of small and medium enterprises (MSMEs).
For instance, another recent recommendation from the same panel calls for revamping the regulatory burden on MSMEs revisiting mandatory audit requirements, board-meeting frequencies, and compliance norms for smaller firms.
Beyond licences, the panel has also proposed resetting more than 200 existing Quality Control Orders (QCOs), which many argue stifle manufacturing competitiveness by imposing mandatory standards even on raw materials and intermediates leading to supply-chain disruptions and higher input costs.
By adopting the Jan Vishwas Siddhant and streamlining compliance, the government hopes to foster a friendlier environment for businesses especially MSMEs and attract greater investment, spur industrial growth, and promote ease of doing business.
What next: Implementation and ground realities
The committee has recommended that all ministries and departments should apply these guiding principles not only to future regulations but also to existing ones and bring their rules into conformity in a time-bound manner.
However, whether these sweeping proposals translate into ground-level change will depend on political will, cross-departmental coordination, and adoption by state governments and local bodies. The shift from a permission-heavy bureaucracy to a trust-based framework may also face resistance from vested interests accustomed to the old system.
Moreover, while the benefit for businesses from reduced red tape to lower compliance costs is clear, advocates of consumer protection and safety will watch closely to ensure that decriminalisation and eased regulation do not compromise standards.
If implemented in letter and spirit, this could well be one of the most significant governance reforms in recent memory fundamentally transforming the relationship between citizens, businesses, and the state.
