Why in NEWS

The Jan Vishwas (Amendment of Provisions) Act, 2023 came into force in August 2023, converting jail terms for 183 minor, non‑malicious offences in 42 Central Acts into monetary penalties. Union Budget 2025‑26 has now announced Jan Vishwas Bill 2.0, which will extend decriminalisation to 100‑plus additional provisions, and it has urged States and municipal bodies to adopt similar reforms.

Key Terms & Concepts

Term / Concept	Meaning
Jan Vishwas Act 2023	An omnibus amendment that decriminalises minor procedural lapses across 42 Central Acts covering 19 ministries.
Decriminalisation	Replacing criminal prosecution (jail) with civil / administrative monetary penalties for minor violations.
Trust‑based Regulation	Governance model that presumes good faith, emphasising voluntary compliance and light‑touch oversight.
Risk‑based Enforcement	Focusing inspection and harsh penalties only on violations that pose significant public harm or involve intent to defraud.
Jan Vishwas Bill 2.0	Forthcoming legislation (Budget 2025‑26) to decriminalise 100+ more provisions and nudge States to mirror reforms. indiabudget.gov.in

Key Provisions & Highlights

Aspect	Details
Scale of Reform	183 provisions across 42 Acts—e.g., the Environment (Protection) Act 1986, Food Safety Act 2006—now carry graded fines instead of imprisonment. egazette.gov.in
Ministries Impacted	Environment, Agriculture, Corporate Affairs, Consumer Affairs, Shipping, Health, etc.
New Penalty Model	Monetary penalty slabs linked to turnover / gravity; amounts auto‑indexed to inflation every three years.
Adjudication	Designated adjudicating officers replace criminal courts for minor transgressions, cutting case backlog.
Effective Date	Majority of amendments took effect from 1 Aug 2023; ministries issued rules by Oct 2023. aggarwalassociates.com

Need & Benefits

Problem	How the Act Helps
Colonial‑era punitive clauses created fear and rent‑seeking.	Converts petty offences to fines, reducing harassment of MSMEs.
5 crore+ cases clog courts, many for trivial lapses.	Administrative penalties bypass courts, easing judicial burden.
High compliance cost hurt MSME formalisation.	Simplified, uniform penalty framework and self‑declaration lower entry barriers.
Overlapping federal rules cause uncertainty.	Serves as template; several States (e.g., Kerala) are drafting similar Bills. timesofindia.indiatimes.com

Challenges

Challenge	Explanation
Legacy culture of suspicion among regulators.	Field inspectors still prefer raids over risk‑based audits.
Patchy State‑level follow‑through.	~80 % of jailable clauses lie in State Acts; progress uneven.
No agreed “trust” metric.	Hard to measure impact the way GDP or tax collections are tracked.
Digital implementation gaps.	Portals like e‑Bill and PARIVESH still face downtime & data‑repetition issues.

Strengthening Trust‑Based Regulation (Way Forward)

Measure	What to Do
One Nation, One Business ID	Merge PAN‑GST‑CIN into a single digital ID using Digi‑Locker‑style credentials.
Deregulation Commission	Centre‑State body to prune redundant compliances yearly.
Mandatory Regulatory Impact Assessment	Use AI analytics to target audits; link fines to quantified harm.
Transparency Dashboards	Real‑time publishing of inspections, orders, and appeal outcomes to deter discretion.

In a Nutshell (Mnemonic)

“DECRIM”

• Drop jail for small slips
• Enable trust‑based audits
• Court backlog cut
• Risk‑linked fines
• Investor confidence up
• MSMEs scale faster

Prelims Practice Questions

1. Which of the following statements about the Jan Vishwas Act 2023 is/are correct?
   1. It replaces imprisonment with fines for all violations under the Companies Act 2013.
   2. It mandates indexation of penalties to inflation every three years.
   3. It sets up a Deregulation Commission at the national level.
      Choose the correct option:
      (A) 1 only 
      (B) 2 only 
      (C) 1 and 2 only 
      (D) 2 and 3 only
2. Under a trust‑based regulatory approach, which of the following is LEAST consistent with the philosophy?
   (A) Self‑declaration of compliance
   (B) Risk‑based inspections
   (C) Mandatory imprisonment for first‑time paperwork errors
   (D) Online single‑window approval system
3. Which ministry’s legislation was amended by the Jan Vishwas Act to decriminalise offences related to environmental compliance?
   (A) Ministry of Agriculture
   (B) Ministry of Corporate Affairs
   (C) Ministry of Environment, Forest & Climate Change
   (D) Ministry of Finance

Mains Practice Questions

1. “Decriminalisation of minor offences is necessary but not sufficient for a truly trust‑based regulatory environment.” Discuss with reference to the Jan Vishwas Act 2023.(GS II – 2024) 
2. Analyse the likely impact of the proposed Jan Vishwas Bill 2.0 on India’s goal of becoming a USD 5‑trillion economy by 2029‑30. Suggest complementary reforms at the State level.(GS III – 2023)

Prelims Answers & Explanations

Q. No.	Answer	Explanation
1	B	Only statement 2 is correct. The Act covers select provisions across 42 Acts, not ALL offences in Companies Act, and it does not itself create a Deregulation Commission.
2	C	Mandatory jail for first‑time paperwork errors contradicts trust‑based regulation.
3	C	Sections of the Environment (Protection) Act 1986, under MoEFCC, were amended