The story so far:

Unnecessary criminalisation is an anathema to business regulations. India’s regulatory framework has significant punitive aspects. Under dozens of Central Acts, minor procedural lapses, missed filings, or technical defaults could land a citizen or a small business owner in jail. The Jan Vishwas (Amendment of Provisions) Bill, 2025-26, seeks to shift India’s regulatory approach from a punitive model to “trust-based governance.” It builds on the earlier Jan Vishwas (Amendment of Provisions) Act, 2023, which decriminalised 183 provisions across 42 Central laws.

Why is the Bill being introduced?

The 2026 Bill proposes amendments to 784 provisions across 79 Central Acts administered by 23 ministries. Of these, 717 provisions are earmarked for decriminalisation, while the rest address ease of living more broadly. Its governing principle is proportionality — the severity of the State’s response must bear a rational relationship to the gravity of the conduct it targets.

The Bill pursues three related goals, all rooted in ensuring proportionality in regulation.

First, it seeks a principled separation between conduct that warrants criminal sanction, such as fraud, wilful evasion, and threats to public safety, and procedural non-compliance that carries no comparable moral charge. Conflating the two does a disservice to the seriousness of the former and an injustice to those caught by the latter.

The second objective is equity. Smaller enterprises and MSMEs are disproportionately exposed to compliance risks, not because they violate laws more often, but because they lack the capacity to absorb the consequences when accused of doing so. The idea is to make compliance simpler.

Third, it seeks to provide institutional relief. India’s district and subordinate courts carry over 4.8 crore pending cases (NJDG, December 2025), a significant share of which consists of minor regulatory matters. Decriminalising such cases is not leniency but a rational reallocation of judicial resources.

What are the key features?

The Bill focuses on removing the criminal liability clause for minor procedural lapses and improving the ease of doing business and living.

Its central mechanism is the replacement of criminal penalties with civil and administrative alternatives. The measures on imprisonment provisions are intended to be replaced by monetary penalties calibrated to the gravity of the violation.

For minor or first-time defaults, graded responses such as warnings and advisory notices replace prosecution. Compounding provisions are expanded to provide faster resolution without full adjudication.

Adjudicating officers are empowered to decide cases within defined timelines, with appellate mechanisms to ensure fairness. Penalties are to be periodically revised to retain their deterrent value, and the Bill emphasises digitisation and procedural simplification to reduce inconsistencies in enforcement.

How does it impact institutions?

For the judiciary, the most immediate consequence is meaningful relief. Diverting routine regulatory cases from criminal dockets should free courts to concentrate on matters of genuine public significance.

For regulatory agencies, the Bill increases responsibility. Administrative adjudication is faster and less resource-intensive than criminal prosecution, but it requires institutional capacity, clear guidelines, and oversight mechanisms to avoid arbitrariness. The appellate structures built into the Bill acknowledge this risk, and hence, their effectiveness will depend entirely on how seriously they are operationalised.

For businesses, particularly MSMEs, reduced criminal exposure could meaningfully shift the calculus around formalisation. The fear of prosecution, even where the underlying conduct is technical rather than intentional, has long acted as a disincentive to transparency and engagement with the formal economy.

How does the Bill promote efficient justice?

The indiscriminate use of criminal sanctions — treating a tax fraudster and a businessperson who faltered on a procedural formality — undermines the law’s pragmatism. By reserving criminal liability for conduct involving genuine intent or harm, and channelling procedural defaults through civil mechanisms, the Bill narrows the scope for over-criminalisation in a structured way.

A more predictable regulatory environment encourages voluntary compliance. When the consequence of a minor lapse is a proportionate penalty rather than the spectre of prosecution, the incentive structure shifts towards transparency. The durability of these gains will depend on implementation. Enhanced administrative discretion must be matched with clear guidelines, meaningful oversight, and appellate mechanisms that function as genuine checks.

The Jan Vishwas Bill is a serious and overdue reform. Its success will depend less on what it says than on whether the institutions tasked with carrying it forward are genuinely equipped, and held accountable, to do so.

There is a risk of excessive discretion in administrative authorities, weak appellate safeguards in some sectors, the possibility that monetary penalties may replace criminalisation without reducing the burden, and limited clarity on uniform standards across different laws.

(The author is the Vice Chancellor of the National Law University, Delhi. Contributions of Vibhuti Sharma, Academic Fellow, NLU Delhi, are acknowledged)