Sanjeev Sanyal is Member, Economic Advisory Council to the Prime Minister of India (EAC-PM) and Aakanksha Arora is Director, EAC-PM.
Public discourse on economic reforms often focuses on large interventions—new tax laws, major institutional restructuring, major privatization or other sweeping policy changes. While such ‘structural reforms’ are undoubtedly important, they are only part of the story. A less visible but equally critical category of reform is ‘process reforms’. They are targeted changes, usually with special focus on the individual sector or issue–aimed at reducing friction, eliminating redundancy, and improving outcomes.
In the public sector, processes develop gradually over time. New regulations are added to existing ones, rules become layered, and responsibilities get fragmented. Most systems evolve without any holistic redesign, and processes are rarely examined from first-principles. This results in systems that are technically functional but practically cumbersome—marked by delays, duplication of effort by both citizens and officials, and high transaction costs. Process reforms attempt to address this very problem.
Any process reform usually involves the following steps: (a) mapping the existing “as-is” process, (b) identifying the bottlenecks, (c) taking action to remove the identified obstacles, and (d) tracking the results. Process mapping is the foundation of effective process reform. It involves documenting the end-to-end flow of a procedure. Without this, it is difficult to identify exact bottlenecks. Once issues are identified, the method to undertake these reforms may involve simple administrative streamlining in certain cases, while in others it may require change in regulations or even legislation.
There has been a systemic focus on process reforms across sectors in India in recent years. Examples include the overhaul of the intellectual property rights ecosystem, streamlining of the voluntary liquidation process and so on.
A recent example of such reform is the process of reclaiming the unclaimed dividends and shares from Investor Education and Protection Fund Authority (IEPFA). We illustrate these reforms in IEPFA in detail in this article.
IEPFA is a statutory body set up in 2016 under the Companies Act, 2013, to administer the Investor Education and Protection Fund (IEPF) in India. This fund accumulates dividends and related corporate shares that remain unclaimed for seven years. The idea is that IEPFA will act as the custodian of these unclaimed assets and will facilitate their return to the rightful owners.
However, the process had evolved in such a way that the claimants often had to wait close to three years to recover their dividends or shares. Unsurprisingly, many claimants either abandoned their claims midway or resorted to paying commissions to intermediaries to navigate the system. Consequently, investors’ hard-earned money remains stuck with the IEPFA for years despite claimants making every effort to complete the formalities. As of end-March 2025, close to 51,000 applications were pending with IEPFA.
The core issue was not a lack of intent or institutional capacity. Instead, it lay in the design of the process itself. The ‘as-is’ mapping of the process revealed that overall procedure involved as many as 25 steps. To make matters more complicated, the process spanned three digital portals that operated in silos and did not speak to each other. First was MCA-21 which was used for submitting and approving applications, second was the depositories’ portals for transferring shares, and the third one was PFMS which was used for processing dividend payments.
This fragmentation created a system that required repeated data entries, manual verification, creation of multiple documents etc., leading to duplication of efforts and unnecessary sequential processing. This made the system prone to not only delays but even errors. Any objection at a later stage could also derail the whole process and force the claimant to go back to the starting point— like in a ‘snakes and ladders’ game. The system was so complicated that even after the approval was granted by the concerned IEPFA authorities, after multiple layers of scrutiny and many years of efforts, the transfer of shares and dividends took another 18-24 months.
Note here that these problems were not such that they required any regulations or legislative change. They were operational issues and could be addressed through administrative redesign. Accordingly, the reforms that followed focused on streamlining the process. The most significant change was the most obvious one — the integration of the three portals. Simply doing this reduced the number of steps from 25 to 15. Not only this, under the new system, once approvals are granted, transfers of shares and dividend now occur in parallel and almost instantaneously as the integration has removed the need for manual entries and moving of application across portals. Hence, what earlier took up to two years is now completed within a few days.
All pending applications were migrated to the new backend portal by August, and the system has now been fully operational for more than six months. The impact of these changes has been remarkable!
Between April and September 2025, an average of about 850 applications were approved each month. Following the rollout of the new system, the approvals have increased significantly: 3,614 in October 2025, 7,570 in November, 11,443 in December, 8,837 in January 2026, 12,005 in February 2026 and 14,523 in March 2026. This implies an average of 9,660 applications each month— higher than even the previous annual average. At this pace, the accumulated backlog should clear in the next few months. Meanwhile, the new cases are already being onboarded to the new portal— hence they should be relatively quicker to process.
This pattern—of small inefficiencies constraining overall system performance—is not unique to IEPFA but reflects a broader phenomenon across sectors and countries. The transformation of IEPFA underscores the importance of process reforms. These reforms shift the focus to operational details and recognize that the ‘nuts and bolts’ of governance—forms, workflows, approvals, and interfaces—are not peripheral concerns, but central determinants of efficiency.
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