OECD 2025: Boosting Regional Business by Easing Administrative and Financing Constraints
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure | SDG 17: Partnerships for the Goals
Ministry of Finance | Department for Promotion of Industry and Internal Trade (DPIIT) | Ministry of MSMEs
The OECD report, Boosting Business in Regions (2025), highlights how institutional quality and access to finance at the subnational level are critical drivers of productivity and entrepreneurship. A key finding is that administrative delays in obtaining operating licenses—which can exceed 60 days in 25% of global regions—can reduce firm creation by up to 25%. Similarly, high bank concentration in regions restricts credit access for SMEs, whereas competitive local banking markets can increase employment by roughly 0.2 additional employees per establishment.
Key strategy recommendations include:
Digital “Once-Only” Approach: Implementing systems where firms provide information once, which is then shared across public bodies to reduce repetitive inputs and administrative burdens.
Subnational One-Stop Shops: Establishing region-specific digital portals that provide locally relevant permitting and zoning information to reduce search costs.
Agile Regulation: Utilizing regulatory sandboxes with short evaluation cycles for fast-moving sectors like autonomous vehicles and fintech to balance innovation with safety.
Public Credit Guarantees: Expanding the use of credit guarantees and public development banks to fill regional financing gaps, particularly in underserved non-metropolitan areas.
Combating Corruption: Streamlining complex regulations to limit discretionary powers of officials, as a 10% reduction in corruption-related obstacles can raise regional GDP per capita by 0.6%.
What is the “Once-Only” Principle? It is an e-government strategy where citizens and businesses are required to provide their data to public administrations only once. Public authorities then take responsibility for internally sharing and reusing this data—under strict security and privacy rules—to eliminate redundant paperwork, lower compliance costs, and minimize administrative errors
Policy Relevance
The OECD findings offer a consolidated roadmap for strengthening India’s Ease of Doing Business (EoDB) agenda, with a decisive shift from national rankings to state- and district-level execution:
Simplifying Regulatory Landscapes: India’s fragmented land-use regulations, licensing regimes, and municipal permits continue to impede regional growth. Scaling “once-only” systems through the National Single Window System (NSWS)—aligned with Digital India—can reduce compliance costs, lower cognitive burden for small firms, and enable high-frequency entrepreneurship in tier-2 and tier-3 cities.
Strengthening MSME Financing Architecture: The report validates the central role of public development banks such as SIDBI and credit guarantee mechanisms like CGTMSE in addressing the collateral gap. This is especially critical in rural and high bank-concentration districts, where many viable but “undiscovered” firms remain excluded from formal credit.
Bridging Regional Financing Disparities: Persistent subnational gaps in credit access underscore the need to complement bank lending with equity financing and hybrid financial instruments. These tools can support the scaling of India’s rural and small-town startup ecosystem, improving resilience beyond metro-centric growth.
Digitisation as an Anti-Corruption Lever: The OECD’s emphasis on one-stop shops and automated compliance highlights how a robust digital trail reduces discretion, empty churn, and institutional distrust. This reinforces India’s Faceless Assessment and GSTN reforms as governance tools, not just efficiency upgrades.
Evidence-Based Subnational Policy Design: By stressing subnational SME data, the report provides a blueprint for the Ministry of Finance to craft targeted, state-specific interventions. Such data-driven policymaking is essential for addressing uneven administrative capacity and ensuring inclusive growth.
Urban–Rural Compliance Equity: With evidence that rural firms face significantly higher tax-compliance burdens than urban counterparts, the findings support investments in digital literacy, assisted-tech kiosks, and hand-holding mechanisms in aspirational districts, ensuring reforms translate into real ease on the ground.
Follow the full report here: Economic Outlook for Southeast Asia, China and India 2025 - Enhancing Disaster Risk Financing