Budget 2025: Jan Vishwas Bill 2.0 to decriminalize over 100 provisions to promote ease of doing business

The government will introduce the Jan Vishwas Bill 2.0 to decriminalize over 100 more outdated legal provisions to promote the ease of doing business in the country, said Union finance minister Nirmala Sitharaman while presenting the Union Budget 2025-26 on Saturday.

The announcement follows the success of the Jan Vishwas (Amendment of Provisions) Act, 2023, which decriminalized over 180 legal provisions.

The Jan Vishwas Act 2023 decriminalized sections in the copyright, trademarks, patents, and geographical indications of goods act, replacing penalties for minor offences with monetary fines. 

For example, it amended the Trade Marks Act of 1999, eliminating imprisonment for minor violations. Section 108 no longer punishes misleading business connections with jail time, while Sections 109 and 107(2) replaced prison sentences with fines based on business turnover.

Experts suggest the Jan Vishwas Bill 2.0 could decriminalize minor non-compliance issues across various laws to simplify business operations. For instance, procedural lapses like late filings under the Companies Act of 2013 could be converted into civil penalties, and tax violations like late GST filings may be treated as administrative offences. 

The bill is also expected to cover industries such as agriculture, labour, and commerce, with changes to laws like the Drugs and Cosmetics Act of 1940 and the Food Safety and Standards Act of 2006. 

A key feature is shifting the handling of certain offences from courts to designated authorities, reducing the fear of imprisonment for minor infractions.

“New act will boost the compounding of certain offences by designated authorities instead of courts. The aim is to reduce the fear of imprisonment for minor infractions and promote a business-friendly regulatory environment. Another aspect is the reduction of the judicial burden,” said Gauhar Mirza, partner, Cyril Amarchand Mangaldas.

According to Mirza, its impact will be multifold. It will boost business and investments, encourage entrepreneurship by reducing regulatory risks and legal uncertainties, and align with India’s ease of doing business initiative to attract both domestic and foreign investment.

“Foreign investment is also likely to increase, as global investors prefer jurisdictions with lower compliance risks and predictable legal frameworks,” said Raheel Patel, partner, Gandhi Law Associates.

He added that by making India’s regulatory environment more business-friendly, “the Jan Vishwas 2.0 could boost investor confidence and strengthen India’s position in the ease of doing business rankings”.

However, they caution that the success of these reforms depends on effective implementation and ensuring that regulatory oversight remains balanced. If executed well, the Jan Vishwas Bill 2.0 has the potential to make India’s economy more competitive, inclusive, and legally efficient in the years to come.

Think tank Observer Research Foundation highlighted legal bottlenecks in its 2022 report Jailed for Doing Business: The 26,134 Imprisonment Clauses in India’s Business Laws. Of the 1,536 laws governing business in India, more than half contain imprisonment clauses, the report said. 

These laws create a complex regulatory environment where minor process violations—such as delayed filings—can lead to harsh penalties, sometimes even on par with serious crimes like sedition under the Indian Penal Code, it added. 

For instance, the Companies Act of 2013 contains 176 imprisonment clauses, with sentences ranging from less than three months to up to 10 years. The Jan Vishwas Bill 2.0 is expected to significantly reduce these barriers, fostering a more business-friendly climate.

Source: Livemint