Sant Kumar Sharma
The Jan Vishwas 2026 Bill is a part of the ongoing reform process initiated by Prime Minister Narendra Modi’s government over a decade ago. Harassment of businessmen and common citizens due to regulatory provisions was fairly common in an era of `License Raj’ that earlier Congress-led governments fostered. Deregulation or lesser regulatory laws has always helped market sentiment and proved to be beneficial. The Micro, Small and Medium Enterprises (MSMEs), which provide employment to a large number of people, have been major beneficiaries of the government loosening its grip. Entrepreneurs now face far less challenges in scaling up as they don’t have to face too many ifs and buts, hallmark of earlier regulatory regimes. Small businesses are often the hardest hit by complex compliance as they often do not have lawyers working for them who will see them through the complex maze of regulatory laws. This Bill will help them as it removes the sword of “Inspector Raj” and spending time in jails for procedural errors. We have often heard about long pendency in our courts and by moving minor cases to administrative adjudication, the Bill helps reduce this backlog.
Officials will have adjudicating powers to conduct inquiries and impose penalties. Since there will be appellate mechanisms too, the structured mechanism will help unclog the courts. By some estimates, it is believed that as much as one-third of court cases may just vanish over time, unburdening the courts.
We have seen in the past how decriminalising minor infractions helped improved the ecosystem, encouraging investors and entrepreneurs. The new Bill is a clear indication that as a nation, we are shifting gears and moving towards a trust-based governance model. The focus is now on corrective measures rather than punishing people with criminal charges. Ever since its inception, this government has led by example by putting in place a basic philosophy of “Minimum Government, Maximum Governance” that rewards honesty.
The new amendments seek to remove lacunae observed over the last three years and complex regulations that led to corruption and fixers (middlemen in offices) will become a thing of the past. Simplifying laws and removal of control-based system, like doing away with the 2012 retrospective tax amendment, which hit Vodafone and Cairn Energy, have helped improve India’s image globally as a reliable investment destination. The Jan Vishwas (Amendment of Provisions), Bill, 2023, was also aimed at amending certain enactments for decriminalising and rationalising offences to boost trust-based governance for ease of living and doing business.
The replacement of criminal penalties with civil penalties in many areas will lead to twin benefits of making governance trust-based and business-friendly. The Bill has a very wide sweep as it changes 784 provisions across 80 Central laws, introducing uniform enforcement. Its goal is to improve regulatory efficiency, ease of living and ease of doing business.
At one time, when Modi headed Gujarat government as CM, he used to organise `Vibrant Gujarat’ summits aimed at attracting investments. Little bureaucratic interference, and hastening up various processes, including land allotment and acquisition, processing subsidy components faster, and such other measures were the hallmarks that he established. Most of those experiences and insights which he gained then are now being replicated at the national scale.
The current Bill is not based on whims as its basis is a deep consultation process involving a 24-member Select Committee which held 49 meetings. At these meetings, inputs received from various stakeholders, including ministries, experts and industrialists were duly considered. This ensured a balanced approach to decriminalisation where public harm/benefits remained the top criteria for incorporation of the changes.
It is not a monochromatic law in that it touches only one sector as if offers relief all around. One of the engines of our economic growth over the last few years has been the pharmaceutical sector. By introducing several changes to the Drugs and Cosmetics Act 1940, the new law has become lenient towards procedural infringements like failure to submit timely returns or statements.
This will help companies avoid unnecessary legal cases, ensure compliance and encourage them to scale up in an honest manner. The sector, particularly the trend witnessed in the recent past of enhanced manufacturing, use and export of generic drugs, is a huge positive. The new changes will help make pharma units more competitive and help capture a bigger share of the global market.
The graded enforcement mechanism that it introduces will lead to issuance of warnings for first-time or in some cases, even second time minor lapses. It also has new provisions which go a step further and under the Legal Metrology Act, 2009, businesses are to be given a specified time period to rectify non-compliance before penalties come into play.
The new provisions for dealing with minor civic violations is encouraging for urban residents as it makes compliance easier and removes the threat of imprisonment that gave too much powers in the hands of officials. This sure is going to curb corruption and encourage growth as the fear factor goes away.
The reforms in the National Highways Act, 1956, will not only reduce court cases, they will also lead to a better regulatory system. The movement of goods, transport sector, is a vital clog in any type of economic activity and a more liberalised transportation will help economic growth, create opportunities. The changes to the Motor Vehicles Act, 1988, will improve existing mechanisms substantially. Minor procedural violations and serious road safety offences are clearly demarcated as only minor offences are decriminalised. One very significant change in the new regime is that graded monetary penalties and administrative action replace provisions of imprisonment.
For the `Make in India’ and `Startup India’ initiatives, reduced compliance burden will prove to be catalytic enhancers for growth. The growing numbers of recognized startups, over 2.12 lakh going by the last count, will be helpful as it will strengthen the investment climate. The hand holding by various government agencies to correct minor infringements will help businesses operate more easily, instead of trying to trap them in cases.
These reforms are actually a significant step away from a punishment-based architecture to a supportive governance model. By sharpening the competitiveness of our business environment and simultaneously making them citizen-friendly, India’s global ease of doing business rankings stand to improve.For the financial year just gone by, Indian exports stood at over $790 billion and these can only rise further in the coming years as our defence sector has also joined the bandwagon. These developments align well with our fast growing economic strength and presence in new markets globally. Overall, it is one more step in the direction of aspirational goal of Viksit Bharat 2047 when we will be a century old as an independent nation.
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