Decriminalisation of Business Laws: Jan Vishwas (Amendment of Provisions) Act, 2023, the Jan Vishwas Act, 2026 (2.0), Ease of Doing Business and Ease of Living (UPSC Notes + PYQs)

Why jail for a late form?

Imagine a small bakery in Pune that forgets to display a licence, or a factory in Ludhiana that files a return a week late. In many Indian laws, such slips could, on paper, lead to a prison term. Studies of India’s regulatory maze found that laws governing business carried more than 26,000 clauses providing imprisonment, many for technical or procedural defaults. Most of these were never used, but their presence gave inspectors a stick to wave, invited petty corruption and kept honest entrepreneurs nervous. Courts, already carrying over five crore pending cases, were burdened with trivial prosecutions.

The idea behind Jan Vishwas, which means “people’s trust”, is that the State should trust citizens and businesses by default and punish real harm, not paperwork mistakes. Criminal law should be kept for fraud, danger to life and serious damage to the environment, while minor lapses are handled with fines decided quickly by an officer, not years later by a magistrate.

The 2023 Act

• Passed: by Parliament in July-August 2023 after scrutiny by a Joint Parliamentary Committee; received the President’s assent on 11 August 2023.
• Scope: 183 provisions in 42 Central Acts administered by 19 ministries and departments.
• Key shift: imprisonment replaced by monetary penalties for many minor offences; some offences removed altogether.
• Adjudicating officers: designated officials can impose penalties through a quick administrative process, with appeals provided.
• Indexation: fines and penalties rise by 10% of the minimum amount every three years, so they do not lose force with inflation.
• Acts covered include: the Indian Post Office Act, 1898 (later replaced), the Environment (Protection) Act, 1986, the Information Technology Act, 2000, the Copyright Act, 1957, the Patents Act, 1970, the Motor Vehicles Act, 1988, the Food Safety and Standards Act, 2006 and the Drugs and Cosmetics Act, 1940.

Jan Vishwas 2.0: from the 2025 Bill to the 2026 Act

A second bill was introduced in the Lok Sabha on 18 August 2025 and referred to a Select Committee chaired by Tejasvi Surya. The Committee reported on 13 March 2026 and recommended going much further, to cover dozens more Acts. The government withdrew the 2025 Bill on 17 March 2026 and introduced the Jan Vishwas (Amendment of Provisions) Bill, 2026, which was passed by the Lok Sabha on 1 April and the Rajya Sabha on 2 April 2026.

The 2026 Act also reforms property tax in the New Delhi Municipal Council area, with a valuation committee and a hardship committee, and removes the advertisement tax there.

Decriminalise, not deregulate

A common confusion in answers is to treat Jan Vishwas as removing rules. It does not. The obligation, for example to keep records or file a return, remains. What changes is the consequence for breaking it. A table makes the shift clear:

Why it matters

• Ease of doing business: fewer criminal provisions lower compliance risk, especially for MSMEs that cannot afford legal teams.
• Ease of living: citizens face fewer criminal cases for minor civic lapses.
• Judicial relief: removing trivial prosecutions frees court time for serious crime.
• Less corruption: when the threat of jail disappears, so does a lever for extortion by inspectors.
• Investment climate: foreign and domestic investors value predictable law; this fits with the shift from the four labour codes to self-certification and the National Single Window System.
• Proportionality: the principle that punishment should match the harm is a basic idea of criminal justice.

Earlier steps

Jan Vishwas builds on earlier work: the decriminalisation of compounding offences under the Companies Act, 2013 through amendments in 2019 and 2020; the Limited Liability Partnership (Amendment) Act, 2021; the repeal of over 1,500 obsolete laws since 2014; and State-level drives to remove compliances. Several States, including Uttar Pradesh, Maharashtra and Gujarat, have passed or proposed their own Jan Vishwas-type laws, since a large part of business regulation sits with States.

An example from the ground

Take the Legal Metrology rules that govern how packaged goods are labelled. A shopkeeper who sells a packet with a smudged date of manufacture once faced the theoretical risk of prosecution. Under the trust-based approach, an inspector would first issue advice, then a penalty if the lapse is repeated, while deliberate short-weighting that cheats consumers would remain a serious offence. The same logic, separating honest mistakes from intent to harm, runs through every amended Act and is the simplest way to explain the reform in an interview.

Concerns

• Weaker deterrence: environmental groups argue that replacing jail with fines under laws such as the Environment (Protection) Act lets big polluters pay and continue.
• Executive as judge: adjudicating officers are government officials, raising questions about independence and due process.
• Limited scale: a few hundred provisions are a small share of the thousands of jail clauses at Central and State levels.
• State laws: much of the compliance burden for small firms is under State laws and local rules, which the Central Acts do not touch.
• Fines as revenue: penalties can become a new tool of harassment if officers chase targets.

Way forward

Set up a standing mechanism, perhaps a regulatory review body, to scan every new law for unnecessary criminal clauses. Classify offences into those involving fraud or harm, which stay criminal, and procedural lapses, which become civil. Give adjudicating officers training, timelines and independent appeal routes. Encourage States to pass matching laws with Centre support. Combine decriminalisation with digital, self-certified compliance so that fewer inspections are needed. Keep strong criminal penalties for serious environmental and safety violations, so that trust does not turn into impunity.

PYQ trend

Prelims has asked about ease of doing business indicators. Mains GS-II and GS-IV ask about governance reform, the civil servant as facilitator rather than regulator, and citizen-centric administration.

Jan Vishwas Act: UPSC angle

Jan Vishwas Act UPSC PYQs (Prelims)

Questions UPSC has actually asked, from the official papers. Pick an option to check yourself.

Mains PYQs on this topic

Questions from the official UPSC Mains papers (2023-2026 in the Battle IAS Mains bank), newest first. Each links to a model answer.

1. UPSC Mains 2025 · GS Paper IV · Q5b · 10 marks

   To achieve holistic development goal, a civil servant acts as an enabler and active facilitator of growth rather than a regulator. What specific measures will you suggest to achieve this goal?

   Model answer and approach

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