Welcome to the latest edition of India Governance Watch! The first half of December 2025 marks a clear inflection in India’s governance strategy: policy is being engineered around enforceability, fiscal certainty, and systems-level execution rather than expansionary intent. Between 1–15 December, the Union Government advanced a cluster of reforms that recalibrate tax architecture, lock in regulatory continuity, and hard-code digital public infrastructure into core state functions.
This period saw capital and turnover thresholds for small companies raised to ₹10 crore and ₹100 crore respectively, a 25 bps repo rate cut to 5.25%, the introduction of machine-linked excise and cess regimes with penalties up to five years of imprisonment, approval of ₹11,718 crore for India’s first fully digital Census, and the creation of national registries for addresses and rural water assets.
This edition of India Governance Watch documents how governance in this phase is being shaped less by new schemes and more by institutional hardening, regulatory continuity, and data-first public administration.
I. Economic and Structural Reforms
A. Policy Updates
Revised Definition Of Small Company - Ministry of Corporate Affairs
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Summary: Effective December 1, 2025, the Ministry of Corporate Affairs (MCA) revised the definition of a "Small Company" under Section 2(85) of the Companies Act, 2013, significantly raising the financial thresholds. The Paid-up Share Capital limit has increased from ₹ 4 crore to ₹ 10 crore, and the Annual Turnover limit has risen from ₹ 40 crore to ₹ 100 crore. This expansion means more companies now qualify for "Small Company" status, which provides a reduced compliance burden, including exemptions from preparing cash flow statements, fewer mandatory board meetings, and more relaxed audit requirements. The ultimate goal is to reduce compliance costs and improve the ease of doing business.
The Central Excise (Amendment) Bill, 2025 - Ministry of Finance
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Summary: The Central Excise (Amendment) Bill, 2025 was introduced in Lok Sabha on 1st December 2025 and was passed in both Lok Sabha and Rajya Sabha. It seeks to amend the Central Excise Act, 1944. The Act governs the levy and collection of central excise duties on goods manufactured or produced in India. While most central excise duties were subsumed under the Goods and Services Tax (GST) regime (2017), tobacco and tobacco products remain subject to central excise duty, GST, and GST compensation cess. With the planned discontinuation of the compensation cess, the Bill revises central excise duty rates on tobacco and tobacco products to maintain overall tax levels. Central excise duty on unmanufactured tobacco (such as sun-cured tobacco leaves) is increased from 64% to 70%. For manufactured tobacco products, the duty is enhanced from ₹ 200–₹ 735 per thousand cigarettes to ₹ 2,700–₹ 11,000 per thousand cigarettes. Duties on other tobacco products are also raised: chewing tobacco duty increases from 25% to 100%, hookah or gudaku tobacco from 25% to 40%, and smoking mixtures for pipes and cigarettes from 60% to 325%.
Health Security se National Security Cess Bill, 2025 – Ministry of Finance
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Summary: The Ministry of Finance introduced the Health Security se National Security Cess Bill, 2025 in Lok Sabha on 1st December 2025 and subsequently on 5th December 2025, levies a cess on the production of goods such as pan masala and other notified products, with proceeds earmarked for public health and national security expenditure. The cess will be payable by persons owning or controlling machines or manual processes used for manufacturing the specified goods, assessed monthly per machine or manual unit. For machine-based production, the cess will depend on the maximum rated speed and pouch weight ranging from ₹ 1.01 crore per month per machine (speed up to 500 pouches per minute, 2.5 g each) to ₹ 25.47 crore (speed 1,001–1,500 pouches per minute, over 10 g each) while wholly manual units will attract ₹ 11 lakh per month per factory. The Bill empowers commissioners to conduct audits, recover unpaid cess with interest, and impose penalties and also establishes a three-tier appeal mechanism.
RBI Cuts Repo Rate By 25 Basis Points To 5.25% - Reserve Bank of India
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Summary: The RBI Monetary Policy Committee (MPC) unanimously decided to reduce the repo rate by 25 basis points to 5.25%, marking the first change after a five-month pause. The MPC chose to retain a neutral policy stance, though Prof. Ram Singh advocated for a shift to an accommodative stance. This rate cut was facilitated by a combination of factors, including low core inflation (at 2.6% excluding gold) and a significant easing in headline inflation, primarily driven by exceptionally favorable food prices. Consequently, the benign outlook for both headline and core inflation, coupled with the existing growth-inflation balance, provides ongoing support for the current growth momentum and room for sustained credit expansion.
Industrial Relations Code (Removal of Difficulties) Order, 2025 – Ministry of Labour & Employment
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Summary: To ensure a smooth transition following the implementation of the Industrial Relations Code, 2020 on November 21, 2025, the Central Government has issued the Industrial Relations Code (Removal of Difficulties) Order, 2025 under section 103 of the Code. This Order clarifies that existing Labour Courts, Industrial Tribunals, and National Industrial Tribunals established under the previous Industrial Disputes Act, 1947, will continue to handle both pending and new cases. This measure effectively ensures the continuity of adjudication, preventing any legal or administrative gap until new tribunals are constituted under the 2020 Code.
II. Infrastructure, Technology and Sustainability
A. Policy Updates
Proposed Amendments To The Post Office Act For DHRUVA Digital Address Framework – Ministry of Communications
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Summary: The Department of Posts (DoP) is proposing draft amendments to the Post Office Act, 2023, to provide legal backing for the Digital Hub for Reference and Unique Virtual Address (DHRUVA) initiative. This initiative aims to create an interoperable, standardised, and user-centric addressing system as part of the national digital public infrastructure, enabling "Address as a Service" (AaaS). The proposed framework includes establishing a national Network Administrator, a governance architecture, a consent-based mechanism for address information, and provisions for grievance redressal and penalties. The goal is to streamline governance and service delivery by using unique Digital Address Identifiers (DAI) as proxies for physical addresses.
Cabinet Approves CoalSETU Policy for Flexible Coal Linkages - Ministry of Coal
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Summary: The Union Cabinet has launched the new CoalSETU policy, an auction-based window under the existing New Coal Distribution Policy, to allow domestic industrial buyers to secure long-term coal linkages without restrictions on end-use. Key features include flexible usage for the buyer's own consumption, coal washing, group company use, or export (up to 50% of the quantity). Resale within India remains prohibited. The policy aims to increase washed coal availability, reduce imports, align domestic supply with industrial demand, and promote coal-sector liberalization through a market-driven, export-facilitating system.
TRAI–RBI Launches Digital Consent Pilot For Promotional SMS - Ministry of Communications
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Summary: The Telecom Regulatory Authority of India, in collaboration with the Reserve Bank of India, has launched a Digital Consent Acquisition (DCA) pilot, under which select customers will receive SMS alerts from short code 127000 to digitally review, manage, and revoke legacy consents for promotional communications involving 11 participating banks across 9 Telecom Service Providers. The pilot aims to resolve fragmented and opaque legacy consent practices under the Telecom Commercial Communications Customer Preference Regulations, 2018 by migrating paper-based and system-captured consents to a unified registry. This provides customers with a single digital interface to view, continue, modify, or withdraw consents at any time.
III. Human Development and Social Welfare
A. Policy Updates
Draft Medical Devices (Amendment) Rules, 2024 - Ministry of Health and Family Welfare
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Summary: The Ministry of Health and Family Welfare has proposed the draft Medical Devices (Amendment) Rules, 2024, to update the Medical Devices Rules, 2017. These rules are currently open for thirty days of public consideration. Key proposed amendments include allowing Class A (Non-Sterile and Non-Measuring) Medical Devices to use "Registration number" or "Reg. No." on labels; transitioning most licenses and registration certificates to perpetual validity contingent on timely retention fee payment; and adding a new requirement under Rule 85 for registration certificate holders and testing laboratories to use the new Form MD-44 for reporting medical device test results.
Cabinet Approves ₹ 11,718 Crore For Census 2027 - Ministry Of Home Affairs
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Summary: The Union Cabinet has approved an outlay of ₹ 11,718 crore for Census 2027, which will be the 16th national census and the first-ever digital one. The census will be conducted in two phases: the Housing Census in 2026 and the Population Enumeration in 2027. The digital transition will utilize secure mobile applications for data collection, a Census Management & Monitoring System (CMMS) portal for real-time supervision, and a Houselisting Block Creator web map tool for field operations management. A key expected outcome is the release of data with improved visualization tools and the provision of village/ward-level data access, which is intended to enhance evidence-based planning.
V. Rural And Agricultural Transformation
A. Policy Updates
Sujalam Bharat Digital Platform Establishes National Registry For Rural Water Governance - Ministry of Jal Shakti
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Summary: The Ministry of Jal Shakti has launched the Sujalam Bharat App under the Jal Jeevan Mission. This unified, real-time digital registry is designed for rural drinking water systems, assigning a unique Sujal Gaon ID to each habitation scheme. It creates a digital profile that consolidates all relevant data, including water sources, assets, operational records, water quality, and community feedback. By integrating with PM Gati Shakti GIS, the app enables precise mapping of rural water networks, which will help state governments plan repairs and expansions. This initiative is expected to enhance community oversight, improve the performance of local service providers, and ensure the sustainable and reliable delivery of safe tap water to rural households.
Withdrawal Of Petrochemical Quality Control Orders – Ministry of Chemicals and Fertilizers
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Summary: The Department for Promotion of Industry and Internal Trade (DPIIT) has withdrawn the mandatory quality control requirements for several petrochemicals, including p-Xylene, Toluene, and Ethylene dichloride, among others. This action, executed via notifications under the Bureau of Indian Standards Act, 2016, removes the obligation for these petrochemicals to conform to specified Indian Standards or carry the BIS Standard Mark for both domestic producers and importers. The government, however, reserves the right to reinstate these standards in the future if market conditions or safety considerations require it.
Minimum Support Price (MSP) for Copra for 2026 Season - Ministry of Agriculture and Farmers Welfare
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Summary: The Union Cabinet has approved increased Minimum Support Prices (MSP) for copra for the 2026 marketing season. The new rates are ₹ 12,027 per quintal for Milling copra (a ₹ 445 increase) and ₹ 12,500 per quintal for Ball copra (a ₹ 400 increase). This decision aligns with the government's policy of setting the MSP at 1.5 times the cost of production, guaranteeing at least a 50% return to cultivators. Since 2014, these MSPs represent a significant long-term growth of approximately 129% for Milling copra and 127% for Ball copra. NAFED and NCCF will continue to act as the Central Nodal Agencies for procurement under the Price Support Scheme (PSS).
VI. Miscellaneous Policy Updates
A. Policy Updates
Draft Rules On Gig And Platform Workers’ Social Security – Ministry of Labour & Employment
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Summary: The Ministry of Labour & Employment has released draft rules to implement social security provisions for gig and platform workers, as outlined in the Code on Social Security, 2020. These draft rules specify the processes for registration, define the contribution mechanisms required from aggregators, and detail the methods for putting in place welfare schemes such as life, disability, health insurance, and old-age protection. Furthermore, the draft rules impose obligations on digital platforms and aggregators regarding data-sharing, reporting, and payment. The Ministry is currently soliciting stakeholder comments during the consultation period to formalize this welfare coverage.
Banking Regulation (Co-operative Societies) Amendment Rules, 2025 Notified - Ministry of Finance
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Summary: The Ministry of Finance has introduced the Banking Regulation (Co-operative Societies) Amendment Rules, 2025, effective December 15, 2025. These amendments to the 1966 rules aim to enhance supervisory oversight and simplify compliance for co-operative banks. Key changes include formally defining an "ineligible director" and establishing a process for their removal, as well as revamping statutory return reporting formats by replacing the alternate-Friday cycle with standard fortnight, month, and quarter-end deadlines. The reforms are intended to reduce "entrenched misgovernance" on co-operative bank boards.
Inland Vessels (Design and Construction) First Amendment Rules, 2025 Notified – Ministry of Ports, Shipping and Waterways
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Summary: The Ministry of Ports, Shipping and Waterways has issued the Inland Vessels (Design and Construction) First Amendment Rules, 2025, updating the 2024 standards. The amendments focus on enhancing safety, stability, and incorporating new technological requirements for inland vessels. Key changes include updated technical norms for modern materials, equipment, and the integration of smart/autonomous systems. These revisions aim to improve navigational safety, environmental performance, and provide clearer compliance guidelines for all stakeholders.
B. Announcements
Use Of Short Range Automotive Radar System In The 77 To 81 GHz Band (Exemption from Assignment Requirement) Rules, 2025 - Ministry of Communications
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Summary: The Department of Telecommunications (DoT) published the "Draft Use of Short Range Automotive Radar System in 77-81 GHz band Exemption from Assignment Requirement Rules, 2025" on December 1, 2025. This rule exempts the spectrum for automotive radar systems from standard assignment procedures. This exemption is vital for the fast deployment of Advanced Driver Assistance Systems (ADAS) like adaptive cruise control and collision avoidance, helping achieve Vision 2030 automotive safety goals and making the country more attractive as a connected vehicle manufacturing hub by reducing compliance burdens.
Mandatory Retail Sale Price On Pan Masala – Ministry of Consumer Affairs, Food & Public Distribution
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Summary: The Department of Consumer Affairs has introduced the Legal Metrology (Packaged Commodities) Second (Amendment) Rules, 2025, amending the 2011 rules. The key change, effective February 1st, 2026, mandates that all packs of pan masala, including the smallest sizes (10 grams or less), must clearly display the Retail Sale Price (RSP) and all other mandatory declarations. This dual-purpose amendment aims to enhance consumer protection through transparent pricing and improve tax administration by facilitating the RSP-based GST levy and revenue collection, even on the smallest retail units.
Appointment of New Chief Information Commissioner – Ministry of Personnel, Public Grievances & Pensions
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Summary: The President has approved the appointment of Raj Kumar Goyal, the former Union Law and Justice Secretary, as the new Chief Information Commissioner (CIC) under the Right to Information Act, 2005. This appointment was made following the recommendation of the Appointments Committee of the Cabinet and a selection process led by the Prime Minister's high-level committee. The formal notification of his tenure fills the top post in the Central Information Commission and is anticipated to positively influence the consistency of adjudication, reduce pendency, and strengthen the enforcement of transparency norms across central public authorities.
V. Key Takeaways for the Fortnight :
Compliance Is Being Relaxed Where Scale Is Binding
The expansion of the “Small Company” definition now covers firms with 2.5× higher capital and turnover limits, materially lowering audit and reporting burdens. Medical device licences shift to perpetual validity subject to retention fees, while multiple petrochemical Quality Control Orders were withdrawn, eliminating mandatory BIS certification. The pattern is consistent: reduce compliance density where it constrains investment, tighten it where revenue or safety is at stake.
Monetary Policy Is Prioritising the Growth Channel
The RBI’s 25 basis point repo cut to 5.25%, enabled by core inflation at 2.6% (excluding gold) and easing food prices, reopens the credit transmission channel after a five-month pause. Crucially, the stance remains neutral, indicating measured growth support without abandoning inflation discipline.
Fiscal Engineering Is Replacing Ad-Hoc Taxation
With the discontinuation of the GST compensation cess approaching, the state moved decisively to rebuild revenue certainty. Central excise on cigarettes was raised from ₹200–₹735 to ₹2,700–₹11,000 per thousand, chewing tobacco duty increased to 100%, and a new Health & National Security Cess introduced machine-wise monthly levies up to ₹25.47 crore per unit. This signals a shift from consumption-based spillovers to capacity-indexed taxation with audit and recovery powers.
Digital Public Infrastructure Is Being Statutorily Embedded
December 2025 formalised DPI as governance infrastructure. Census 2027 will be India’s 16th census and first fully digital, conducted via Android/iOS apps with a Census Management & Monitoring System (CMMS) and ward-level geospatial mapping. Parallelly, DHRUVA establishes “Address as a Service”, while Sujalam Bharat assigns unique Sujal Gaon IDs integrating assets, quality reports, and community feedback.
Regulatory Continuity Is Being Prioritised
The Industrial Relations Code (Removal of Difficulties) Order, 2025 preserves Labour Courts and Tribunals under the 1947 Act until new bodies are constituted. This avoids adjudication paralysis post-code rollout and reflects a governance choice: continuity of dispute resolution over textbook transitions.
The December 1–15, 2025 policy window reveals a state increasingly comfortable with precision governance. Rather than multiplying schemes or broadening mandates, the focus is on closing revenue leakages, stabilising institutional transitions, and converting digital tools into enforceable systems. Whether through machine-indexed taxation, tribunal continuity orders, or national-scale digital registries, governance is being structured to withstand scale and complexity.
As India moves deeper into its Viksit Bharat horizon, this period illustrates a governing logic that prioritises durability and execution.