According to these article  ,  on Value Research SEBI is planning to ask the Mutual funds to simplify their plans and broadly categorize them into a small number of objectives. There are both pro and cons of this.
On the pro side it will help the investor by making different offering comparable. This will lead to increase in competition among Mutual Funds and improve their performance. On the other hand it can curb innovation. For example as discussed in this article Asset Management Companies (AMCs) are introducing funds which names having words like child care etc. These funds by invoking investor sentiment of children etc are trying to reduce the sensitivity of fund inflow to market conditions. Ultimately it is beneficial to both retail customers and the funds.
If the new regulation requires Mutual funds to not have more than one or two products in a given category then we might not see such innovations in future.