Budget 2025: Mechanism to review financial regulations paves way for responsive policies, experts say
Subscribe to enjoy similar stories. Finance minister Nirmala Sitharaman said a mechanism would be set up under the Financial Stability and Development Council (FSDC) to evaluate the impact of financial regulations and subsidiary instructions. The initiative will also formulate a framework to enhance the responsiveness and development of the financial sector, Sitharaman said in her budget speech on Saturday.
The proposed mechanism will assess the effectiveness of financial regulations and ensure they are aligned with the evolving needs of the market and contribute to stability. It will focus on enhancing the adaptability of the financial sector to future challenges. The FSDC, established in 2010, has worked to streamline and stabilize the financial sector through inter-regulatory coordination.
Experts said the planned mechanism could pave the way for more streamlined and responsive policies that foster long-term growth, boost investor confidence, and ensure economic stability. Amit Tungare, managing partner at Asahi Legal, described the move as a step toward adaptive financial governance. He highlighted the foresight in creating a structured approach to evaluate regulatory impact.
“By assessing existing regulations and their effects, this mechanism will help reduce compliance burdens and enhance market responsiveness—a crucial balance the financial sector has long needed," he said. The Economic Survey tabled in parliament on 31 January emphasized the need to create independent agencies within financial sector regulators to evaluate regulations from multiple perspectives. These agencies, according to the survey, will report directly to the board rather than the management of the regulator, offering impartial assessments of
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