Across India, states are advancing small, targeted reforms to cut red tape. While sweeping national reforms inch forward despite renewed calls for bold reforms amid tariff tensions, states including Odisha are increasingly leading the way, recalibrating business rules on the ground. The Centre is helping nudge them towards deregulation, but states seem to be on board with the perceived benefits of these steps. The trend reflects a growing view at the highest levels of the Central government that progressive, state-level tweaks—faster to implement and with broader impact—should be prioritised for now.
Recently to increase employment opportunities for women and facilitate ease of doing business, Odisha Government has allowed the engagement of women employees during night shifts in shops and commercial establishments across the state. The labour and ESI department, amending the Odisha Shops and Commercial Establishments Act, 1956, issued a set of strict conditions to ensure the safety and dignity of women employees working night shifts.
According to the notification, establishments must obtain written consent from women opting for night shifts. The employer must ensure a minimum of three women are on duty during such hours, and a designated female supervisor must also be present. An earlier clause that had imposed limitations on women night shift work in private firms, was withdrawn.
Odisha modernised building bye-laws in June to let MSMEs and IT/ITeS firms use space more efficiently. The state’s Department of Housing and Urban Development of Odisha has introduced major amendments to both the Odisha Town Planning and Improvement Trust (Planning and Building Standards) Rules, 2021 and the Odisha Development Authorities (Planning and Building Standards) Rules, 2020, which are designed to streamline regulations and ease the compliance burden.
For instance, parking requirements for industrial buildings have been reduced to 8 per cent from 30 per cent of the total built-up area to allow more productive use of space.
The Rajasthan Labour Department had, in a July 8 notification, allowed commercial establishments to employ women during night hours. Delhi did the same on July 30, after having scrapped the requirement for restaurants and hotels to seek police approval the previous month on June 19.
While the Centre is now pushing for reforms at the state level, a newly-formed Deregulation Cell in the Cabinet Secretariat is also targeting select national regulations. On May 27, it set up an inter-ministerial group to review quality control orders (QCOs) that could enable “unfair trade practices” or hurt MSMEs. In June, it clarified that the National Building Code, 2016 is “not legally binding” but a “voluntary code of reference,” offering relief to the construction industry.
Earlier, in February, the Economic Survey 2024-25 called for state-led deregulation to liberalise standards and controls, such as lifting restrictions on women’s participation in factories and rationalising parking norms. It urged states to review regulations on administration, land, building and construction, labour, utilities, transport, logistics, local trade, environment, and sector-specific rules.
“The logic for staying small often is to remain under the regulatory radar and steer clear of the rules and labour and safety laws. Ironically, the biggest casualties are employment generation and labour welfare, which most regulations were originally designed to encourage and protect, respectively,” the Economic Survey 2024-25 said.
“Unburdened by licensing, inspection and compliance requirements, the people and small enterprises of India, with their high aspirations and intrinsic inventiveness, will find answers to the pressing challenges of growth, employment and development,” it said.
