JAN VISHWAS BILL 2.0

Why is in News?

In response to the India Business Corruption Survey, 2024 showing 66% of businesses paying bribes, Budget 2025 unveiled Jan Vishwas 2.0, designed to alleviate regulatory compliance challenges."

What is Jan Vishwas 2.0?

• Aim – To further decriminalize around 100 provisions in various laws to enhance the ease of doing business in India.
• It builds upon the Jan Vishwas (Amendment of Provisions) Act, 2023, which had already decriminalized 180 provisions across 42 laws.

What is the need for the bill?

• Decriminalize more provisions – While Jan Vishwas Act 2023 decriminalized 180 provisions with imprisonment clauses, Jan Vishwas 2.0 aims to decriminalize approximately 100 more provisions.
• However, over 20,000 provisions with imprisonment clauses still remain untouched.
• Trust-Based Governance – The initiative reflects a move towards "trust-based governance," where the emphasis is on fostering a system of compliance through trust rather than fear of punishment.  
• It is designed to reduce the regulatory burden on businesses.
• Reduce corruption and bribery – The document cites that 66% of businesses admit to paying bribes, with 54% being coerced to do so to navigate government processes.
• The bill aims to reduce opportunities for corrupt practices.
• Simplify regulatory compliance – Indian businesses face extremely complex compliance challenges with 9,420 compliance updates in the past year alone (about 36 daily changes).
• This creates inefficiency and opportunities for corruption.
• To increase foreign investment – The document mentions that 4 out of 5 respondents in an EY-FICCI survey believe corruption deters foreign direct investment (FDI).
• Improving compliance frameworks would make India more attractive for global investors.
• Maintain economic competitiveness – The document warns that India risks losing investment and talent to countries with more business-friendly environments, like the United States, which is advancing its own governance reforms.

What are the Key Features of Jan Vishwas 2.0?

• Sectors covered – Taxation laws (GST, Income Tax), Labour laws, Company and corporate laws, Environmental compliance laws, Intellectual Property laws (Copyright, Trademark, Patents and Geographical Indications).
• High-Level Committee for Regulatory Reforms – A dedicated High-Level Committee will be set up to review non-financial sector regulations.
• The committee’s key responsibilities include:
  • Identify laws that create compliance burdens.
  • Recommend further decriminalization.
  • Suggest measures to enhance ease of doing business.
  • Compliance Simplification & Predictability
• The government recognizes that frequent compliance updates create confusion and foster corruption.
• Inspired by FSSAI's new regulation (which allows only one update per year for food label changes), a predictable regulatory framework will be introduced for other business sectors.
• One Nation, One Business Identity – Jan Vishwas 2.0 proposes a ‘One Nation, One Business’ Identity System, which will:
  • Unify all business IDs into a single digital identifier.
  • Reduce paperwork, duplications, and bureaucratic delays.
  • Improve regulatory transparency and reduce corruption.
• As India has 23 different business identifiers, it can help to navigate them.
• The 23 different business identifiers include:
  • Permanent Account Number (PAN)
  • Goods and Services Tax Identification Number (GSTIN)
  • Corporate Identification Number (CIN)
  • Professional tax numbers, Factory licenses, etc.
• Digital-First Approach to Compliance – Establishing a factory in India requires submitting hundreds of self-attested and notarised documents across more than 40 government departments.
• This process needs to be transformed as this this archaic system breeds corruption and inefficiency.
• Proposal to introduce ‘Digi Locker’ for Businesses, a tamper-proof, authenticated repository  that could result in:
  • All compliance-related documents to be stored digitally.
  • Government agencies to verify records instantly without requiring notarized hard copies.
  • Entrepreneurs have no longer need to submit hundreds of self-attested documents.
  • Approval timelines for business licenses, factory setups, and permits could be cut from months to days.

What are its impacts?

• Boost India’s Ease of Doing Business Ranking.
• Reduce Corruption & Bureaucratic Delays.
• Encourage Domestic & Foreign Investments.
• Empowering Indian entrepreneurs to "innovate, expand, and create jobs without fear or unnecessary regulatory friction."
• Helps India remain competitive in the global race for investment and entrepreneurial talent.

What are its Challenges & Concerns?

• Limited scope – While Jan Vishwas 2.0 aims to decriminalize around 100 provisions, the document points out that over 20,000 provisions with imprisonment clauses would still remain untouched.
• This suggests the bill may be insufficient in scale.
• Slow implementation – The government initiated compliance reforms two years ago, but progress has been "sluggish."
• This raises concerns about timely implementation of Jan Vishwas 2.0.
• Systemic corruption – Deep-rooted corruption issues that may not be fully addressed by decriminalization alone.
• Officials "often wield compliance provisions as tools to extract bribes" and "unofficial payments are still required" even when compliances are met.
• Regulatory chaos – With 9,420 compliance updates in the past year (36 daily changes), there's concern that decriminalizing some provisions won't solve the fundamental issue of excessive and frequently changing regulations.
• Competing reforms globally – Other countries like the US are making their business environments more efficient, creating pressure for India's reforms to be sufficiently bold and comprehensive to remain competitive.
• State-level implementation challenges – Labour codes remain in limbo awaiting implementation, suggesting potential challenges in execution across Union and state levels.
• Clarity and Transparency – Ambiguity in certain provisions could lead to arbitrary interpretations by officials, potentially recreating the problems the bill aims to solve.
• Impact on Worker Rights – Concerns exist that decriminalizing labor law violations could weaken worker protections, potentially leading to exploitation.
• Careful consideration is needed to ensure that worker rights are not compromised.
• Less Focus on the informal Sector – The bill primarily targets the formal sector, leaving the vast informal sector largely untouched.
• This raises concerns about equitable treatment and the potential for increased disparities.

Way Forward

• The India Business Corruption Survey 2024 shows that bribery is a big problem.
• Jan Vishwas 2.0 aims to fix this by simplifying laws and reducing red tape.
• However, more steps are needed for real change that include:
  • It can implement a comprehensive decriminalization of the more than 20,000 remaining imprisonment clauses beyond Jan Vishwas 2.0.
  • It can create a unified "One Nation, One Business" identity system to replace the current 23+ separate identifiers.
  • Adopting a digital-first approach with a secure "digi locker" system for document verification.
  • It can establish predictable regulatory changes by limiting updates to once per year across all bodies.
  • It can operationalize the four modern labor codes that remain in limbo.
  • It can reduce subjective power of inspectors who currently operate without accountability.
  • Allocating the budget for digital integration of business compliance systems.

Reference

1. The Hindu | Jan VISHWAS Bill 2.0