India Eyes Major Regulatory Overhaul As NITI Aayog Panel Calls For Scrapping Licences, NOCs And Inspector Raj: Report

A high-level NITI Aayog committee chaired by the government think-tank member Rajiv Gauba has proposed a major transformation of India’s regulatory system.

The panel has suggested the removal of most licences, permits and NOCs, an end to “inspector raj”, and the outsourcing of routine inspections to accredited third-party agencies, Moneycontrol reported.

The committee has also sought predictable policy and tax environments, recommending that all regulations be evaluated for both compliance costs on businesses and enforcement load on the government, according to the report of the high-level panel on Non-Financial Regulatory Reform.

These proposals form the basis of the Jan Vishwas Siddhant, a trust-oriented regulatory approach centred on transparency and efficiency.

The panel outlined several major recommendations:

Licensing: The panel said licensing rules should be risk-based and proportionate. Prior approvals—such as licences, permits and NOCs—should be limited only to matters connected to national security, serious harm to public safety, human health, or environment or significant public interest, and only as provided under the statute.

Activities not expressly restricted by law should not require prior clearance.

Registration: Registration should mainly serve data or administrative needs and must not require approval or rejection.

The committee recommended that self-registration with minimal paperwork should be standard, with most licences and NOCs granted perpetual validity.

Where essential for reasons of national security, serious harm to public safety, human health, or environment or significant public interest, validity may be capped at five or ten years.

End of Inspector Raj: The panel recommended that inspections should be based on computer-assisted randomised selection and risk assessment, and be carried out predominantly by accredited third-party entities.

Selection and periodic performance assessment criteria for third parties shall be put in place and published.

Policy Stability: Regulatory updates should follow a fixed annual calendar, with changes introduced only on scheduled dates unless unavoidable.

New rules must undergo stakeholder consultation and include adequate implementation time.

Impact Assessment: All current and future regulations must undergo cost–benefit evaluation, covering both compliance costs for businesses and enforcement expenses for the government. To facilitate this, a Regulatory Impact Assessment Framework with implementation timelines will be put in place.

Penalties: The committee recommended removing criminal penalties for minor procedural /technical violations and limiting criminal punishment to serious offences linked to security, public order, health, fraud, or major environmental harm.

Penalties must be proportionate to the offence, and all criminal clauses across laws should undergo a full review.

Digital Compliance: The panel urged full digitisation of regulatory filings and seamless interoperability across ministries so that information is submitted only once.

It also called for interlinked government databases with published APIs, and recommended that the Centre eventually encourage states and local bodies to adopt this digitised model to improve ease of doing business and living.

The committee said the principles were shaped through wide consultations and should guide future regulatory reforms. It urged ministries and departments to align both existing and upcoming rules with this framework within a fixed timeline.

The report added that the recommendations are intended to push India toward a trust-driven regulatory model built on transparency and efficiency, with the goal of strengthening confidence among citizens and businesses.

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