It has been a couple of years since India promised itself to be a Viksit Bharat through an Amrit Kaal. In 2025, these promises crystallised into a series of economic and financial reforms. These policy reforms were foresighted and had ease of doing business and ease of living at its core.
It all started with the Union Budget 2025 when the Government of India announced the Income Tax exemption limit up to Rs 12 lakh per annum. From a short term perspective, it appears to be a sacrifice of lakh crore in tax revenue. However, in real terms it provided a boost in domestic consumption for middle-class families by gain in disposable income. Further, the Income Tax Act, 2025 has reduced the number of Sections by 35 per cent. This reduction in complexity along with an increased exemption limit brought in ease of compliance for individuals and small businesses.
The cascading effect of direct taxation reforms spilled over to the indirect taxation as well through the GST reforms. It is forward looking and a paradigm shift in India’s approach to economic governance and indirect tax administration. A complex four-tier tax maze has been replaced with an elegant two-rate structure: Standard rates 18% and Merit rate: 3%, with a Special rates 40% for luxury and sin goods. These GST reforms prove that even indirect taxes can achieve progressive outcomes through thoughtful design and user experience in mind. These reforms position India’s GST system as a global benchmark for federal cooperation in citizen-centric governance. This rationalization reduced household costs by up to 13 per cent, directly impacting ease of living for common citizens. When combined with the income tax relief, these reforms created a multiplier effect: more money in pockets coinciding with lower prices at checkout counters. The timing was deliberate, the impact compounded, and the result was a significant stimulus to consumption-driven growth.
On the manufacturing and trade facilitation front, 2025 witnessed the maturation of the Production-Linked Incentive (PLI) schemes with actual investments reaching Rs 2 lakh crore across 14 sectors, generating Rs 18.7 lakh crore in production/sales and creating 12.6 lakh jobs. More significantly, exports under PLI schemes crossed Rs 5.31 lakh crore, transforming India’s export basket from traditional commodities to high-value electronics and advanced pharmaceuticals. It signals India’s intent to move up the manufacturing value chain.
Complementing this manufacturing push, the Central Board of Indirect Taxes and Customs (CBIC) launched ICEGATE 2.0, modernizing India’s trade facilitation infrastructure. More importantly, CBIC consolidated 31 separate custom duty notifications into a single comprehensive framework effective November 1, 2025. This consolidation eliminated years of regulatory complexity and improved ease of doing business and trade by translating into faster clearances, reduced compliance costs, and improved predictability.
The monetary architecture also underwent its own transformation in 2025. The Reserve Bank of India (RBI), recognizing the rare coincidence of robust growth and declining inflation, implemented three repo rate cuts totalling 125 basis points from 6.5 per cent in February to 5.35 per cent by December. RBI Governor termed it a “Goldilocks period” wherein growth is surging to 8.2 per cent in Q2 while inflation remained controlled around 2 per cent, well within the RBI’s 2-6 per cent target band. The RBI complemented rate cuts with Rs 1 lakh crore in open market bond purchases, a $5 billion forex swap, and a 100 basis points reduction in Cash Reserve Ratio to 3 per cent. More than monetary easing, like CBIC, RBI also went ahead with a transformative move through consolidation of over 9000 circulars, guidelines, and master directions into 244 streamlined Master Directions covering 11 types of regulated entities. It was a fundamental restructuring that reduced compliance burden and improved clarity for the entire financial sector.
Recently, on November 21 the Government of India implemented its four Labour Codes by consolidating 29 archaic central labour laws into a unified framework touching upon 63 million enterprises. The transformation in ease of doing business was staggering: 1436 rules reduced to 351, compliance forms slashed from 181 to 73, and separate registers consolidated from 84 to just 8. But the genius of these codes lay not just in what they removed, but in whom they included. For the first time, gig workers, platform workers, and millions in the unorganized sector found themselves covered under social security, expanding the coverage from 19 per cent of the workforce to over 64 per cent. These reforms transformed not just ease of doing business but ease of living for India’s working population and MSMEs. They were tangible improvements in the daily dignity and security of millions.
These reforms collectively reveal something far more profound: a coherent, coordinated strategy where fiscal policy, monetary policy, trade facilitation, manufacturing incentives, and labour market reforms amplified each other. The 2025 reforms laid the institutional infrastructure for sustained growth: simplified compliance systems, expanded social security, rationalized taxation, modernized trade facilitation, and accommodative monetary policy.
THESE ARE NOT END-POINTS BUT FOUNDATIONS.
2025 proved that India can reform at scale, with coordination, and with an eye toward long-term transformation. The reforms were telescopic: acting in Amrit Kaal while building the architecture for Viksit Bharat by 2047. The foundations laid in 2025 need sustained, systemic and unrelenting execution in 2026 through a whole-of-government and whole-of-nation approach for an inclusive and transformative Viksit Bharat.
Avinash Pandey is a civil servant in the Indian Revenue Service, Government of India. Views are personal and do not reflect those of any organisation or the government.
