A critical juncture in the government’s protracted journey to decriminalise compliance burden in India will be reached when Parliament considers the final version of the Jan Vishwas Bill later this month. While the government may consider incorporating some or all of the Parliamentary joint committee’s expected suggestions, the version of the Bill already introduced is a welcome legislative intervention. and hopefully, it will be passed without major modifications in the current session.

It clubs a number of amendments in different statutes to decriminalise a staggering number of compliances that create barriers in the ease of doing business in India. The proposed Bill, thus, is an omnibus legislation that aims to decriminalise 183 offences across 42 Central Acts including Environment (Protection) Act, Public Liability Insurance Act, Information Technology Act, Motor Vehicles Act, Legal Metrology Act and even the contentious Prevention of Money-Laundering Act (PMLA). 

Already, the Enforcement Directorate has opposed the decriminalisation of PMLA provisions on the grounds that it will curtail the agency’s powers and impede its working. But thankfully, PMLA still remains under the ambit of the laws being amended. This, in itself, should come as a relief to the business community since PMLA’s stringent provisions wherein even to be granted bail, the accused must prove his innocence, coupled with the ED’s heightened activism, have caused widespread unease. The proposed Bill further eases worries by the simple expedient of replacing imprisonment and fines by monetary penalties. Take, for example, the Agricultural Produce (Grading and Marking) Act, under which counterfeiting grade designation marks is punishable with imprisonment up to three years and a fine of up to ₹5,000. The proposed Bill replaces this with a penalty of ₹8 lakh. Similarly, under the Information Technology Act, disclosing personal information in breach of a lawful contract is punishable with imprisonment of up to three years or a fine of up to ₹5 lakh or both. The proposed Bill replaces it with a penalty of up to ₹25 lakh. 

Hostile laws have created an oppressive compliance architecture in India. An ORF report on imprisonment clauses in business laws counts as many as 26,134 such provisions in laws enacted by the Central and State legislatures. Of the 1,536 laws that govern doing business in India, more than half carry imprisonment clauses. Adding to that is the routine changes in compliance requirements which translate to an average of 10 regulatory changes every day. As businesses have transformed in the 21st century with technology and innovation, this archaic administrative stranglehold remains among the biggest challenges for their growth and expansion. Finance Minister Nirmala Sitharaman’s statement in Budget speech that the government has reduced 39,000 compliances and decriminalised over 3,400 legal provisions brings a much-needed relief under the circumstances. This is the right direction but the pace needs to be fast-tracked. Simultaneously, the government has to make sure that future alterations and additions in compliances are divested of criminal provisions.