The Jan Vishwas Bill 2.0 is a clear signal to the international community that India is committed to aligning its regulatory system with global best practices.
By Badri Narayanan Gopalakrishnan & Abhishek Jha
The Jan Vishwas (Amendment of Provisions) Bill, 2025, is not merely a piece of legislation; it is a strategic and fundamental component of India's larger economic policy aimed at dramatically improving the country's Ease of Doing Business ranking. By meticulously decriminalizing and rationalizing minor offenses across numerous laws, the bill seeks to dismantle the regulatory web that has historically stifled entrepreneurship, deterred foreign investment, and burdened the judicial system. It represents a philosophical shift from a governance model based on fear and punitive action to one founded on trust and voluntary compliance.
At its core, the Bill promotes ‘trust-based governance’ by replacing suspicion with facilitation. Building on the 2023 Jan Vishwas Act, it widens coverage and institutionalizes a progressive penalty regime. Its impact spans sectors from pharmaceuticals to textiles, agriculture to transport, and local governance. The Government has placed emphasis on deregulation, decriminalization, and improving ease of doing business, recognizing that India’s aspiration to become Viksit Bharat and a leading global manufacturing hub cannot be achieved if enterprises remain bound by outdated and punitive regulations.
The problem: A legacy of over-criminalization
For decades, India's regulatory landscape has been characterized by an excessive number of provisions that prescribed imprisonment for even the most trivial, technical, or procedural lapses. This "Inspector Raj" mentality created an environment ripe for corruption, as businesses, particularly small and medium-sized enterprises (SMEs), operated under the constant threat of criminal prosecution for minor errors. The system, in effect, discouraged innovation and risk-taking, as any misstep could lead to legal action, fines, or even jail time. This created significant compliance costs and a climate of distrust between the government and the private sector.
A 2024 India Business Corruption Survey highlighted the severity of this issue, with a significant percentage of businesses admitting to paying bribes to navigate complex regulatory processes. This legal and bureaucratic friction has been a major factor holding back India's potential to become a global economic powerhouse.
Decriminalization as a catalyst for growth
The Jan Vishwas Bill 2.0 directly addresses these challenges by making a clear distinction between a "crime" and a "minor default." It is an acknowledgment that a late filing or a procedural oversight is not a criminal act and should not be treated as such. The bill’s key provisions are designed to be a direct catalyst for improving the business environment. The most significant reform is replacing jail with penalties. The proposed removal of imprisonment clauses for 288 provisions across 16 central acts.
By substituting jail terms with monetary penalties, the bill drastically reduces the legal risk for businesses. A company no longer has to fear that a minor, inadvertent error in their paperwork could lead to criminal prosecution, encouraging compliance and freeing resources for core operations. The Bill adopts a proportionate penalty regime, like warnings for minor lapses, higher fines for repeat or deliberate non-compliance. For example, under the Drugs and Cosmetics Act, a six-month jail term is replaced with a minimum fine of ₹30,000; the Central Silk Board Act now imposes penalties up to ₹1 lakh; and the Apprentices Act shifts from imprisonment to advisories and fines. Even minor traffic violations under the Motor Vehicles Act now invite warnings before fines. To maintain deterrence, all penalties will rise by 10% every three years.
Additionally, the introduction of the "improvement notice" mechanism for first-time offenders is a game-changer. It sends a powerful message that the government's objective is to foster a culture of compliance, not to penalize for every mistake. Businesses that have committed a minor default will be given a chance to rectify it, promoting a cooperative and restorative relationship with regulators. This empowers entrepreneurs and reduces the adversarial nature of compliance.
Further, a major bottleneck in India's legal system is the overwhelming number of minor cases clogging the courts. By empowering designated officers to impose penalties through an administrative process, the bill will significantly unburden the judiciary. This efficiency will lead to a faster resolution of disputes, a more reliable contract enforcement system, and a more attractive environment for investors who value legal predictability.
Unrepining investments
Global investors prioritize jurisdictions with stable, transparent, and predictable legal frameworks. The Jan Vishwas Bill 2.0 is a clear signal to the international community that India is committed to aligning its regulatory system with global best practices. By reducing legal and operational risks, the bill makes India a more competitive and appealing destination for foreign direct investment (FDI), which is crucial for job creation and economic growth.
The "Make in India" initiative and the flourishing startup ecosystem depend on a business environment that is free from excessive bureaucratic hurdles. The bill's reforms, particularly the removal of archaic provisions under acts like the Apprentices Act, 1961, and other labor-related laws, make it easier for companies to set up and expand. This freedom allows entrepreneurs to focus their energy on innovation and market expansion rather than on navigating a complex web of outdated laws.
Jan Vishwas 2.0 is more than a legal amendment as it marks a shift from command-and-control regulation to facilitative partnership. Aligned with global best practices, it brings India closer to countries like Singapore, New Zealand, and Denmark that prioritize administrative penalties, predictable frameworks, and trust-based enforcement.
Challenges and the path ahead
While the bill is a transformative step, its success hinges on effective implementation and a broader commitment to reform. Some critics argue that the bill's scope is still limited, as many more laws with criminal provisions remain untouched. The challenge will be to extend the principles of this bill to a wider array of central and state laws.
Furthermore, a "One Nation, One Business Identity" and a "digi locker" system, as envisioned by the government, will be crucial to truly simplify business operations. By integrating various business identifiers into a single digital platform, the government can eliminate paperwork, reduce duplicative efforts, and make the entire compliance process seamless. By moving away from an outdated, fear-based system, the bill is set to unlock India's economic potential, attract investment, and truly enhance the country's Ease of Doing Business. It is a crucial step in transforming India into a globally competitive, transparent, and entrepreneur-friendly economy.
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(Dr Badri Narayanan Gopalakrishnan, a senior economist formerly with NITI Aayog, is a Distinguished Fellow & Abhishek Jha is a Fellow at Pahlé India Foundation, a New Delhi–based think tank)
The views expressed are not necessarily those of The South Asian Times
