In its year-end assessment for 2025, the Union government has projected the year as a defining moment for India’s reform agenda, arguing that the country chose to “think bigger, move faster, and reform deeper” despite facing significant global and domestic challenges. Released amid continuing political contestation and repeated disruptions in Parliament, the assessment portrays 2025 as a period marked by sweeping policy changes spanning labour laws, taxation, trade, education, energy, rural employment, and ease of doing business.

According to the government, these reforms were driven by Prime Minister Narendra Modi’s call from the Red Fort on Independence Day to modernise regulations and rewrite laws to meet the needs of “21st century India.” Officials said the reform push gained momentum even as India navigated unprecedented external pressures, including higher tariffs imposed by the United States, tightening global financial conditions, and stricter visa regimes affecting skilled mobility.

The government acknowledged that both the monsoon and winter sessions of Parliament were frequently disrupted by opposition protests and sharp political disagreements. Nevertheless, it maintained that the legislative output of 2025 reflected a strong commitment to long-term economic restructuring and institutional change.

Labour reforms take centre stage

One of the most significant developments highlighted in the assessment was the implementation of the four new labour codes, which replaced 29 existing labour laws. These codes cover wages, industrial relations, social security, and occupational safety and health, and are aimed at simplifying compliance while expanding worker protections.

The government said that nearly 10 million gig and platform workers are now eligible for annual social security support ranging from ₹5,000 to ₹10,000. In addition, between 50 million and 70 million contract workers are being brought under the ambit of the Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI), significantly expanding the social security net.

A national minimum wage, introduced as part of the reforms, is expected to benefit between 150 million and 180 million low-paid workers by raising baseline earnings. The government argued that these changes could increase the size of the formal workforce by around 15% and help draw nearly 500 million working-age women into the labour force over time. For employers, especially in manufacturing, compliance requirements per factory are projected to fall by 60–70%, improving productivity and investment sentiment.

GST rationalisation and tax reforms

Tax reform was another major pillar of the government’s 2025 narrative. The Goods and Services Tax (GST) system was simplified into a two-slab structure of 5% and 18%, while higher rates were retained for so-called sin goods. The government said the rationalisation was aimed at easing the tax burden on households, micro, small and medium enterprises (MSMEs), farmers, and labour-intensive sectors.

Linking the move to strong consumer demand, officials pointed to Diwali sales worth ₹6.05 trillion as evidence of economic resilience. According to government estimates, the average GST burden on consumers fell by around 5%, with some items seeing reductions of up to 20%. This, it claimed, effectively put nearly ₹1 lakh crore back into the hands of consumers.

Lower GST rates on life and health insurance were also highlighted as a major relief measure, with the government estimating annual savings of about ₹50,000 crore through reduced premiums. Earlier in the year, the Union Budget had already provided income tax relief to the middle class, exempting individuals earning up to ₹12 lakh annually from paying income tax.

A major legal shift came with the replacement of the Income Tax Act, 1961, with the new Income Tax Act, 2025. The government described the new law as clearer, simpler, and less prone to litigation, marking a departure from what it characterised as decades of complex and outdated drafting.

Rethinking rural employment

Rural employment policy also underwent a significant overhaul in 2025 with the passage of the Viksit Bharat G-RAM-G Bill, which replaced the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Passed amid heated protests and repeated parliamentary disruptions, the legislation increased guaranteed rural employment from 100 to 125 days per household.

According to the government, this change could raise annual wage entitlement by about ₹6,675 per household and inject nearly ₹60,000 crore in additional wages each year across 86 million active job cards. The reform was presented as part of a broader effort to align rural employment with development goals, though it remained one of the most contentious legislative moves of the year.

Faster clearances and industrial growth

To accelerate industrial growth, the government said it undertook major changes to environmental and land-use regulations. One key reform involved moving away from a uniform 33% green cover requirement for industrial projects to a system based on pollution potential. Officials said this could unlock around 1.2 lakh hectares of industrial land, reduce project costs by up to 20%, and help attract investments worth ₹20–30 lakh crore.

Manufacturing units located within industrial parks that already have environmental clearance will now typically not require separate approvals, a move expected to cut project delays by six to 18 months. In addition, 32 industries were added to the “White Category,” significantly reducing compliance requirements for an estimated 3,000 to 5,000 units annually.

Ease of doing business and MSME support

As part of its ease of doing business agenda, the government reviewed and rolled back mandatory Quality Control Orders for 76 product categories, with more than 200 additional categories slated for deregulation. Officials said this would lower manufacturing costs, boost exports, and reduce prices in sectors such as footwear and automobiles.

The changes are expected to generate 3 to 3.3 million direct jobs, along with a similar number of indirect jobs. The definition of “small companies” was expanded to include firms with turnover up to ₹100 crore, potentially reducing compliance costs for around 10,000 companies by roughly ₹2 lakh per firm annually. MSME investment and turnover limits were also raised from April 1, allowing enterprises to grow without losing access to MSME benefits.

Insurance, trade, and market reforms

In the insurance sector, the government allowed up to 100% foreign direct investment, a move it believes could bring 80–100 million more people under insurance coverage over the next five years. Officials estimated that the reform could attract $8–12 billion in foreign capital while easing long-term fiscal pressures.

India also advanced its trade agenda by signing agreements with the UK and Oman, finalising a free trade agreement with New Zealand, and operationalising its pact with the European Free Trade Association, which includes a $100 billion investment commitment over 15 years. Trade negotiations continued with the EU, US, Canada, Israel, Mexico, and the Gulf Cooperation Council.

The introduction of the Securities Market Code Bill aimed to consolidate all securities laws under a single framework, potentially cutting compliance costs by ₹500–1,000 crore annually and encouraging fintech-led investment. Under the Jan Vishwas reforms, more than 200 minor offences were decriminalised and 71 outdated laws repealed, with MSMEs projected to save up to ₹85,000 a year in legal and compliance costs.

Maritime, education, and nuclear reforms

The government also highlighted reforms in maritime laws, education, and energy. Five new maritime laws were passed to modernise shipping and port regulations. In education, the Viksit Bharat Shiksha Adhishthan Act replaced multiple regulators with a single authority aligned with the National Education Policy 2020.

In the energy sector, Parliament passed the SHANTI Bill, opening select civilian nuclear projects to private and foreign participation while retaining government control over strategic areas. The government said this could attract between $100 billion and $500 billion in investment by 2047.

Taken together, the government argued, these reforms coincided with strong macroeconomic performance, including 8% GDP growth in the first half of 2025–26. Officials said the reform momentum of 2025 was a critical step toward achieving India’s long-term vision of becoming a developed nation—Viksit Bharat—by 2047.