Trust is a prerequisite for democratic governance. But archaic rules and regulations cause a trust deficit among entrepreneurs.

Apart from the many British era Acts, there are still 69,233 compliances that regulate doing business in India. Among them there are 26,134 clauses across the Centre and States to put an entrepreneur in jail as a penalty for non-compliance.

There is hope that the Jan Vishwas (Amendment of Provisions) Bill 2022, which is likely to be presented in the coming monsoon session of Parliament, will redefine the regulatory landscape of the country.

The Jan Vishwas Bill 2022, seeks to amend 42 laws only but there are approximately 400 central laws that have criminal provisions.

The World Bank Ease of Doing Business Report 2020, ranked India at 63rd position against the 77th rank in 2018. More ease of doing business means more withdrawals or relaxing of regulations leading to the fear of imprisonment for minor offences. The criminal provisions lead to a sense of insecurity and hamper investment decisions.

An Observer Research Foundation (ORF) report reveals that “the total interlinked compliances for the Centre and the State governments for small, medium, and large-sized entrepreneurs are 669, 3109 and 5796 respectively.”

An average manufacturing firm with more than 150 employees deals with 500- 900 compliances in a year that cost nearly ₹12-18 lakh every year and almost two out of five compliances can send an entrepreneur to jail.

The decriminalisation of minor offences will not only make lives and businesses easier but also reduce judicial burden also.

As per the National Judicial Data Grid, as of 31st March 2023, out of a total of 4.24 crore pending cases, 3.16 crore cases are criminal proceedings.

The JPC report had proposed the reducing the burden of over 39,000 compliances across 42 laws and decriminalisation of 3,400 legal provisions with monetary penalties.

Out of these 42 laws 30 are directly linked to industry and trade, administered by 19 Ministries/Departments.

The Jan Vishwas Bill, proposed to decriminalise minor offences by imposing monetary penalties under certain Acts like The Industries (Development and Regulation) Act, of 1951, which was was framed for industrial development and regulation of several activities.

As far as the Trade Marks Act, of 1999, is concerned, falsely representing a trade mark as registered, is punishable with imprisonment up to three years, with a fine, or with both. Amendment in the Bill proposes a penalty of up to ₹1 lakh.

Under the Environment (Protection) Act, 1986, imprisonment for minor lapses is proposed to be replaced with heavier penalties.

Some the provisions of the Information Technology Act, 2000, have also been eased. Breach of confidentiality and privacy is punishable with imprisonment up to two years, with a fine up to ₹1 lakh, or both. Now the Bill has proposed a penalty of ₹5 lakh.

Under the Food Safety Act, for sale of unsafe food, the Bill proposes imprisonment for three months with a fine up to ₹3 lakh.

The way forward

Hopefully, the amendment in the Jan Vishwas Bill will further speed up rationalising criminal clauses and ensure that businesses would operate without fear of imprisonment for minor, technical or procedural lapses. Effective and efficient business regulations are vital to trim down corruption and eliminate unnecessary red tape.

One hopes bringing all business reforms under a single overarching legislation, will infuse dignity to an entrepreneur, which is key to economic growth and job creation.

The writer is Vice-Chairman of Punjab Economic Policy and Planning Board. Views expressed are personal