In a historic decision that signals a major shift in Delhi’s regulatory landscape, the Union Ministry of Home Affairs has withdrawn the Delhi Police’s authority to issue licenses for a wide range of commercial establishments. The decision, effective immediately, brings to an end 45 years of police control over business licensing in the national capital.
The reform, formalised through a notification issued on June 28, 2025, is being widely celebrated as a crucial step towards enhancing the “ease of doing business” in Delhi. The move aligns with Prime Minister Narendra Modi’s broader agenda of “ease of living” and reducing bureaucratic hurdles for citizens and entrepreneurs alike.
A 45-year-old system dismantled
The powers, originally granted under Section 28(1) of the Delhi Police Act, 1978, had placed regulatory authority for business licenses in the hands of the Delhi Police since June 23, 1980. This included control over establishments such as swimming pools, restaurants, eating houses, hotels, motels, guest houses, discotheques, video game parlours, amusement parks, and auditoriums.
Subsequent expansions of this authority over the decades turned licensing into a cumbersome process often cited by businesses as a breeding ground for delays, harassment, and corruption.
The latest notification, signed by Sanjay Arora, Commissioner of Police, Delhi, and published in the Gazette of India on June 19, 2025, puts an end to this regime.
A Big Boost for Business Freedom
Policy expert and former NITI Aayog CEO Amitabh Kant hailed the move as a “landmark reform” in a tweet on July 11, emphasising its potential to unleash growth and jobs by removing archaic regulatory barriers. “This is a vital step in ease of doing business and promoting trust in enterprise,” Kant stated, urging similar reforms across other states to create a nationwide impact.
A landmark reform. After 45 years, the Delhi Police will no longer issue licenses for restaurants, hotels, guesthouses, swimming pools, discotheques, amusement parks, video game parlours, and auditoriums. These powers, first conferred in 1980, have now rightly been withdrawn.… pic.twitter.com/nFCcx1iiIL
— Amitabh Kant (@amitabhk87) July 11, 2025
The decision is expected to significantly cut down the time and costs associated with starting and running businesses in Delhi, potentially attracting more investments and boosting employment in the hospitality, entertainment, and leisure sectors.
Police Raise Safety Concerns
While the reform has been broadly welcomed by industry leaders, sections within the Delhi Police have expressed concerns. Some senior officers argue that the police’s role in licensing provided a mechanism to ensure law and order, safety compliance, and swift response during emergencies.
The abrupt withdrawal of this authority, they fear, could leave a gap in oversight and weaken public safety at venues known for large gatherings, such as clubs and hotels. It remains to be seen how the government plans to address this concern and which agencies will take over safety compliance and regulation.
Lieutenant Governor V.K. Saxena’s Role
The decision follows an order by Lieutenant Governor V.K. Saxena, who used his powers under Sections 3(2) and 4 of the Delhi Police Act to initiate the change. Saxena has been lauded for his role in pushing through this reform, which many see as a courageous step to break free from outdated colonial-era licensing controls.
Amitabh Kant, in his tweet, congratulated Saxena for his bold move, noting that reducing bureaucratic interference is key to making Delhi a thriving business hub.
While the business community has welcomed the change, clarity is still awaited on which authority will now oversee safety, compliance, and public welfare at these establishments. Experts suggest that local municipal corporations or independent regulatory bodies could step in to fill this gap.
National Implications
This move could set a precedent for other Indian states where police still wield similar licensing powers over businesses. Amitabh Kant’s call for a nationwide adoption of this reform underscores the growing recognition that over-regulation stifles growth and innovation.
The reform complements India’s ongoing climb in the World Bank’s Ease of Doing Business rankings, where the country improved from 142nd in 2014 to 63rd in 2020. By eliminating unnecessary layers of approval, the Delhi government has signalled its commitment to economic liberalisation and governance efficiency.
As Delhi transitions into this new regulatory framework, careful attention will be required to ensure that the move doesn’t inadvertently create loopholes that could be exploited or lead to safety lapses. Stakeholders, including business owners, local bodies, and law enforcement, will need to work together to craft a balanced approach.
For now, the reform stands as a symbolic and practical victory for businesses and reflects the Modi government’s ongoing push to modernise governance in India’s urban centres.
The notification, carrying file number 14014/01/2023-UTP (E-3627231), was uploaded by the Controller of Publications, Delhi, on June 28, 2025, and is now in effect across the capital.
