Why In News?

At the ET World Leaders Forum, the Prime Minister outlined a governance doctrine focused on deregulation, Jan Vishwas-based decriminalization of commercial defaults, and replacing production quotas with performance incentives to achieve a $5 trillion economy.

Highlights of the Prime Minister's Address

Shift from 'Production-Linked Punishment' to 'Production-Linked Incentives': The Prime Minister contrasted the historical License Raj where factories were legally prosecuted for surpassing government quotas with the modern ₹1.97 lakh crore Production-Linked Incentive (PLI) schemes that reward scale across 14 key sectors. (Source: PIB)

Transition to 'Permitted Unless Prohibited': Declared administrative reform as replacing state suspicion with constitutional trust, moving to an ecosystem where economic activities are permissible unless explicitly restricted in a transparent negative list.

Systemic Decriminalization and Compliance Rationalization: Highlighted the elimination of over 40,000+ redundant compliances, repeal of 1,500+ obsolete colonial-era statutes, and systematic decriminalization of minor commercial defaults under the Jan Vishwas Acts. (Source: PIB) 

Connecting 'Ease of Doing Business' with 'Ease of Living': Cited the PM Surya Ghar: Muft Bijli Yojana where rooftop solar adoption allows families to sell surplus power to the grid, fostering decentralized entrepreneurship.

India as a Global Anchor of Stability: Emphasized that India’s domestic policy predictability and structural reforms position it as an engine of global economic resilience.

Evolution of Governance: Dismantling the License-Permit Raj

  • The Command Economy (1947–1991): Anchored in the Industries (Development and Regulation) Act, 1951, the state strictly rationed capacity, treating private enterprise expansion as inherently suspect.

  • First-Generation Reforms (1991–2000s): Dismantled industrial licensing for most manufacturing and opened core sectors to Foreign Direct Investment (FDI).

  • Next-Gen Digital Governance (2014–Present): Transitioned to faceless, digital self-certification, deploying the National Single Window System (NSWS) and substituting punitive jail terms with administrative compounding.

 

Core Pillars of Reform: The Jan Vishwas Legislative Framework

Decriminalization of Technical Defaults: The Jan Vishwas (Amendment of Provisions) Act, 2023 and Jan Vishwas 2.0 converted imprisonment provisions for clerical filing delays into civil financial penalties across dozens of central Acts.

Establishment of Adjudicating Officers: Shifts minor commercial dispute resolution from criminal magistrate courts to designated Adjudicating Officers, reducing judicial backlog.

Periodic Indexation of Penalties: Introduces a statutory 10% minimum enhancement of fines every three years to prevent inflation from eroding deterrence.

Key Government Initiatives Promoting Ease of Doing Business

National Single Window System (NSWS): A portal integrating 32 Central Ministries and 27 State Governments, enabling investors to secure over 600+ approvals with a single application.

Production-Linked Incentive (PLI) Schemes: Allocates ₹1.97 lakh crore across 14 sectors, attracting over ₹1.5 lakh crore in private investments and generating 8+ lakh direct jobs. (Source: PIB)

Business Reform Action Plan (BRAP): A state-ranking framework that fosters competitive federalism by grading States/UTs on the implementation of business reforms.

PM GatiShakti National Master Plan & ULIP: A GIS-based platform integrated with the Unified Logistics Interface Platform (ULIP) to reduce national logistics costs to under 9% of GDP.

Abolition of Redundant Compliances: Eliminated 40,000+ business compliance requirements and repealed over 1,500 archaic pre-independence Acts. (Source: PIB)

Key Reports

  • World Bank Business Ready (B-READY) Index: Replaces the old Doing Business methodology, evaluating regulatory quality and digital infrastructure.

  • NITI Aayog State Regulatory Burden Report: Highlights that compliance simplification at local levels generates up to 1.5% additional state GDP growth.

  • CII-EY Ease of Doing Business Survey: Notes that over 78% of enterprises report improvements in tax transparency.

Challenges in Transforming Governance

Persistent Municipal "Inspector Raj": Grassroots businesses face harassment during local municipal trade licensing and fire safety inspections.

  • A single manufacturing MSME in India navigates upwards of 1,450+ regulatory compliances and faces oversight from up to 59 distinct inspector categories.

Judicial Delays in Contract Enforcement: Commercial disputes take an average of 1,445 days to resolve, 

Resolving a standard commercial dispute in Indian courts takes an average of 1,445 days, compared to 164 days in Singapore, leading to capital lockups.

Complex Land Acquisition: Fragmented land records and complex conversion of agricultural land remain major bottlenecks.

  • Land and real estate disputes account for approximately 66% of all civil litigation in India, with an average case pendency exceeding 20 years.

Regulatory Uncertainty: Unpredictable changes in customs tariffs and overlapping regulatory guidelines create compliance anxieties.

High Industrial Input Tariffs: Heavy commercial electricity and rail freight cross-subsidies keep Indian manufacturing operating costs high.

  • Commercial & Industrial (C&I) electricity consumers pay ₹7.50 to ₹11.50+ per kWh, effectively cross-subsidizing agricultural and low-income domestic users who pay ₹0 to ₹2.50 per kWh.

Compliance Burden on Micro Enterprises: Small MSMEs lack dedicated legal departments to navigate complex filings. 

Way Forward 

Codify Statutory Negative Lists: Mandate departments to publish clear "Negative Lists" where non-listed activities enjoy automatic approval.

Extend Jan Vishwas to States: Apply the decriminalization model to state-level commercial legislations and municipal trade bylaws.

Strengthen Commercial Courts & ADR: Establish specialized Fast-Track Commercial Benches and promote institutional arbitration.

Accelerate Digital Land Titling: Complete the Digital India Land Records Modernization Programme (DILRMP) with blockchain-enabled registers.

Implement 'Deemed Approval': Mandate that clearances are automatically generated if a department fails to process applications within 30 days.

Rationalize Tariffs: Implement distribution reforms to reduce industrial cross-subsidies under the Revamped Distribution Sector Scheme (RDSS).

Mandate Stakeholder Consultation: Enforce a 30-day public feedback mechanism before notifying new business regulations.

Conclusion

The transition from 'Prohibited unless Permitted' to 'Permitted unless Prohibited' signifies a mature democratic state that trusts its citizens and entrepreneurs, laying the foundation for a competitive Viksit Bharat@2047.

Source: PIB

PRACTICE QUESTION

Q. With reference to the 'Jan Vishwas (Amendment of Provisions) Act' and administrative reforms in India, consider the following statements:

  1. The Jan Vishwas legislation decriminalizes minor, technical, and procedural defaults across multiple central commercial enactments.

  2. It replaces imprisonment provisions with civil monetary penalties adjudicated by designated administrative officers.

  3. The National Single Window System (NSWS) serves as an integrated digital portal for multi-ministry business clearances in India.

Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3

Answer: (d) 1, 2, and 3
Explanation: 

Statement 1 is correct: The primary objective of the Jan Vishwas legislation is to reduce the compliance burden and enhance the ease of doing business. It systematically decriminalizes minor, technical, and procedural defaults across dozens of central commercial and environmental enactments (such as the Environment Protection Act, IT Act, and Drugs and Cosmetics Act).  

Statement 2 is correct: The Act replaces strict imprisonment clauses for these minor infractions with civil monetary penalties. Crucially, it moves the enforcement from criminal courts to designated administrative adjudicating officers, drastically cutting down judicial backlog.  

Statement 3 is correct: As a broader part of India's administrative and business reforms, the National Single Window System (NSWS) was established as a one-stop digital platform. It integrates multiple Central Ministries and State Departments to allow investors to identify, apply for, and track necessary business clearances seamlessly.