International Journal of Multidisciplinary Evolutionary Research

Unlocking Productive Capacity: A Critical Evaluation of India's Legal Simplification Initiatives and Regulatory Compliance Burdens (2014-2026)

Indrajeet M Acharjee¹

1. ¹

Abstract

His study evaluates the Government of India’s legal simplification initiatives between 2014 and 2026, focusing on the repeal of over 2,000 obsolete statutes, decriminalization of minor offenses under the Jan Vishwas Act, and process digitalization. Grounded in New Institutional Economics and Endogenous Growth theories, this qualitative, secondary data-driven research analyses how these structural interventions reduced regulatory compliance burdens to improve the ease of doing business (EoDB). The findings reject the null hypothesis, confirming that regulatory simplification significantly enhanced India’s long-run potential productive capacity. Administrative tools like the SPICe+ portal compressed corporate incorporation timelines from 30 days to 3.5 days, accelerating recognized startup growth and foreign direct investment (FDI) inflows. Lorenz curve analysis further suggests that regulatory optimization indirectly aids formalization and broader economic participation. Conversely, critical evaluation uncovers a distinct operational asymmetry. While large corporate enterprises successfully optimized efficiency via digital platforms, micro, small, and medium enterprises (MSMEs) face ongoing regulatory drag. For MSMEs, compliance costs as a percentage of operating expenses dropped only minutely, indicating that digital portals often modified the compliance medium rather than dismantling core institutional complexities. Bounded by macro-aggregated data limitations and index discontinuity post-2021, the study concludes that balanced economic expansion requires state-level harmonization, contract enforcement acceleration, and targeted compliance relief for small businesses.

Keywords: Ease of Doing BusinessLegal simplificationRegulatory compliance burdenNew Institutional EconomicsDigitalizationDecriminalizationJan Vishwas Act Long-run aggregate supplyEconomic formalizationMSMEGrowth

How to cite

Licensed under CC BY 4.0.