New Delhi, Dec 30 The economic reforms undertaken by the government in 2025 reflect a clear shift towards outcome-based governance, reducing friction for citizens and businesses, enhancing transparency and efficiency and laying the foundation for sustained, inclusive economic growth.
In a major relief for Indian families and individual taxpayers, the Union Budget 2025-26 introduced substantial reforms in direct taxation, ensuring that annual incomes up to Rs 12 lakh are exempt from income tax under the new regime, with the effective exemption rising to Rs 12.75 lakh for salaried taxpayers on account of the standard deduction. This change reaffirmed the government’s commitment and left millions of middle-class households with higher disposable income, boosting consumption, savings, and investment.
In July 2024, the government announced a comprehensive overhaul of the Income-tax Act, 1961 leading to New Income Tax Act, 2025 -- a landmark development to simplify language, remove obsolete provisions and consolidate and restructure provisions.
The new Act strengthens digital-first enforcement, faceless tax administration, consolidates compliance provisions such as Tax Deducted at Source (TDS) under a single section, empowers the government to introduce technology-enabled schemes, and enhances dispute-resolution mechanisms.
In a landmark reform, the government consolidated 29 existing labour laws into four Labour Codes -- the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020.
The new framework enhances ease of doing business while expanding wage security, social protection, and workplace safety for workers, including women, migrant, gig, and platform workers.
The reforms expand the safety net for India’s workforce, with nearly 10 million gig and platform workers receiving annual social security support. Women workers benefit from assured leave provisions, maternity benefits and improved workplace safety.
Rural employment reforms anchored in the enactment of the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, replaces the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with a modern statutory framework that enhances livelihood security and integrates employment with community development. It has extended the employment guarantee to 125 days of wage employment per rural household in a financial year from 100 days earlier.
To ensure that Quality Control Orders (QCOs) do not disrupt domestic production, the government has implemented them in a phased and MSME-friendly manner through the Bureau of Indian Standards (BIS).
Under the BIS Support Measures for MSMEs, enterprises received concessions on annual marking fees, the in-house laboratory requirement was made optional with access to accredited or shared labs, inspection and testing processes were made more flexible, and product certification guidelines were made publicly accessible to simplify compliance.
The latest next-generation GST reforms mark a decisive step towards simpler taxation, lower burden on citizens, and improved ease of doing business. They significantly strengthen GST’s role as a citizen-centric, business-friendly, and growth-oriented tax system.
The move to a two-slab GST regime (5 per cent and 18 per cent) reduces complexity, classification disputes, and compliance costs, improving ease of doing business, especially for MSMEs and small traders.
Wide-ranging GST rate cuts on essential goods, household items, healthcare products, education materials, housing inputs, and services directly reduce inflationary pressures and enhance household affordability.
In a major boost to India’s trade competitiveness, the Union Cabinet approved the Export Promotion Mission (EPM) as a flagship structural reform with an outlay of Rs 25,060 crore for FY 2025–26 to FY 2030–31. EPM marks a strategic shift from fragmented export support schemes to a single, outcome-based and digitally driven framework, aimed at empowering MSMEs, first-time exporters, and labour-intensive sectors.
The Mission integrates financial support (Niryat Protsahan) including affordable trade finance and credit enhancement with non-financial enablers (Niryat Disha) such as quality compliance, branding, logistics, and market access.
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