Union Budget 2023 emphasised the importance of improving ease of doing business in India.

To help achieve this, several compliance requirements have been eased and certain activities that were earlier criminalised have been decriminalised.

To reduce the compliance burden on individuals and businesses, the Jan Vishwas Bill introduced amendments to 42 Acts including the Indian Post Office Act, 1898; Environment (Protection) Act, 1986; and Information Technology Act, 2000.

Decriminalisation should apply to offences that lack fraudulent or unethical aspects, have no negative impact on public interest.

The goal is to create a system in which sanctions are imposed rather than criminal processes, with the latter reserved for significant contraventions.

Decriminalisation of economic offences in India requires a coordinated strategy by the central and state governments.

Best practices

The government of India can take the lead by offering guidelines, best practices, and technical assistance to states and Union territories.

It could also provide financial incentives and other support to implement the process efficiently. States can engage in public-private partnerships along with other stakeholders to ensure that the decriminalisation process is effective, and meets the needs of businesses and society.

Lastly, they can enlist judicial institutions and legal experts to ensure that the decriminalisation process is fair and transparent. Legal professionals can assist states and UTs in developing laws and regulations that are consistent with decriminalisation concepts.

Decriminalisation of economic offences is a developing trend in many countries, as a way to improve ease of doing business. Singapore, for instance, is recognised as a model for ease of doing business, thanks to its streamlined regulatory framework, efficient government processes, and support for entrepreneurship and innovation.

The Intellectual Property Office of Singapore and the Singapore International Arbitration Centre have been set up to address commercial disputes and settle them through alternative procedures such as arbitration and mediation.

In the US, several states impose civil fines instead of criminal charges for specific economic offences. In California, for instance, white-collar crimes such as securities fraud and embezzlement attract civil penalties and not criminal prosecution.

Lighten the load

The UK has launched measures to reduce the administrative load on businesses, including fewer rules, improved compliance processes, and simpler access to finance and support for enterprises. There are alternatives to criminal punishment in cases such as violation of the Company Directors Disqualification Act of 1986, which attracts fines or restrictions on future participation in company management.

With India climbing from 142nd rank in 2014 to 63rd in 2022 in the World Bank’s ‘ease of doing business’ rankings, efforts are on to achieve further progress. The shift from criminal charges to monetary fines for non-compliance is forward-thinking.

India must continue to focus on reducing compliance requirements while also offering a conducive climate for foreign investment.

(The writer is Senior Associate, King, Stubb and Kasiva, a law firm)