By: Khushbu Ahlawat, Consulting Editor, GSDN
Introduction
India’s regulatory landscape is undergoing a significant transformation with the introduction of the Jan Vishwas (Amendment of Provisions) Bill, 2026—popularly referred to as Jan Vishwas 2.0. At its core, this reform signals a decisive shift in governance philosophy: from a system driven by criminal penalties and fear-based enforcement to one anchored in trust, proportionality, and ease of compliance. In a country striving to enhance its global economic competitiveness and improve the ease of doing business, such reforms are not merely administrative adjustments but structural interventions aimed at redefining state-citizen and state-business relationships.
The earlier iteration, enacted in 2023, marked the beginning of this journey by decriminalising several minor offences across multiple ministries. Building on that foundation, Jan Vishwas 2.0 expands the scope, scale, and ambition of reform, aiming to rationalise outdated laws, reduce compliance burdens, and create a more predictable regulatory environment. This transition is particularly relevant for India’s vast ecosystem of micro, small, and medium enterprises (MSMEs), which often bear the brunt of complex and punitive regulatory frameworks.
The Shift from Criminalisation to Trust-Based Governance
One of the most defining features of Jan Vishwas 2.0 is its departure from the over-reliance on criminal sanctions for minor and technical violations. Historically, India’s regulatory system has penalised even procedural lapses—such as delays in filings or documentation errors—with criminal liability. This not only created compliance anxiety among businesses but also discouraged entrepreneurship.
Jan Vishwas 2.0 addresses this challenge by replacing criminal penalties with civil or administrative measures in a large number of cases. The reform builds on the earlier 2023 Act, which decriminalised 183 provisions across 42 Central Acts administered by 19 ministries. The 2026 Bill significantly expands this scope by proposing amendments to over 784 provisions across 79 Central Acts, with nearly 717 provisions being decriminalised. The move towards decriminalisation and trust-based compliance is also supported by broader regulatory and economic data, which highlights the inefficiencies of over-criminalisation. According to estimates by the NITI Aayog, India has over 26,000 compliance requirements and more than 1,500 laws governing businesses, many of which contain criminal provisions for minor procedural violations. This dense regulatory framework has historically created a high-risk environment for enterprises, where even unintentional lapses could lead to criminal liability. Comparative studies show that in advanced economies, the proportion of business-related offences attracting criminal penalties is significantly lower, with a greater emphasis on civil and administrative enforcement.
Furthermore, India’s logistics and manufacturing sectors—key drivers of economic growth—have often cited regulatory complexity as a major constraint. Surveys conducted among industry stakeholders reveal that over 60% of businesses consider compliance burdens and regulatory uncertainty as key challenges affecting operational efficiency. Excessive criminalisation also imposes indirect costs on the economy by diverting managerial time, increasing legal expenditures, and discouraging innovation.
Jan Vishwas 2.0 directly addresses these structural inefficiencies by rationalising offences and introducing proportionate penalties. By shifting from imprisonment-based penalties to monetary fines and administrative actions, the reform aligns India’s regulatory practices with global standards. Importantly, this approach reduces the fear of punitive action, encouraging businesses to focus on growth and compliance rather than risk avoidance. Over time, such a shift can improve India’s competitiveness in global markets, enhance investor confidence, and contribute to a more efficient allocation of resources across sectors, reinforcing the long-term benefits of a trust-based regulatory framework.
This shift reflects a broader philosophical change: recognising that most regulatory violations are not acts of deliberate wrongdoing but procedural or technical lapses. By treating them as such, the government aims to foster voluntary compliance rather than enforcement through fear. Importantly, stringent penalties are retained for serious offences involving public safety, environmental protection, or national security, ensuring that the system remains balanced and credible.
Reducing Compliance Burden and Boosting Ease of Doing Business
India’s ambition to become a $5 trillion economy depends heavily on its ability to create a business-friendly environment. Excessive regulation and compliance complexity have long been identified as barriers to growth, particularly for MSMEs. Jan Vishwas 2.0 directly addresses this issue by simplifying procedures, rationalising penalties, and eliminating redundant provisions.
The reform is expected to significantly reduce the compliance burden on businesses by introducing graded penalties, warnings for first-time violations, and clear timelines for resolution. For small enterprises operating with limited resources, this can translate into substantial cost savings and improved operational efficiency. The economic rationale behind reducing compliance burdens is strongly supported by both domestic and global data. According to the Ministry of Micro, Small and Medium Enterprises, MSMEs account for nearly 6.3 crore enterprises in India, contributing approximately 30% to the country’s GDP, 45% to total exports, and employing over 11 crore people. Despite their critical role, MSMEs face disproportionately high regulatory costs due to complex compliance requirements, frequent inspections, and the risk of penal action for minor procedural lapses. Studies suggest that small businesses in India spend nearly 15–20% of their operational time dealing with regulatory compliance, significantly higher than global benchmarks. This administrative burden not only reduces productivity but also discourages informal enterprises from entering the formal economy.
India’s performance in global ease of doing business indicators, though improved over the years, has consistently highlighted challenges related to regulatory complexity, contract enforcement, and compliance procedures. For instance, resolving a commercial dispute in India can take over 1,400 days on average, according to earlier global assessments, reflecting systemic inefficiencies that increase the cost of doing business. Furthermore, the multiplicity of laws—often overlapping across central and state levels—creates ambiguity and increases the likelihood of inadvertent non-compliance.
Jan Vishwas 2.0 addresses these challenges by rationalising over 700 provisions and introducing mechanisms such as graded penalties, warnings for first-time offences, and administrative adjudication. These measures are expected to reduce both direct and indirect compliance costs. For example, eliminating criminal liability for minor offences can significantly lower legal expenses, reduce time spent in litigation, and improve business confidence. Additionally, a predictable regulatory environment encourages long-term investment planning, which is critical for sectors such as manufacturing, logistics, and exports.
From a macroeconomic perspective, even a marginal improvement in compliance efficiency can have significant multiplier effects. Increased formalisation leads to better tax collection, improved labour standards, and enhanced access to credit for businesses. By creating a system that prioritises clarity and proportionality, Jan Vishwas 2.0 has the potential to not only ease the compliance burden but also unlock productivity gains across the economy, reinforcing India’s trajectory towards sustained and inclusive growth.
Data suggests that compliance costs in India can account for a significant percentage of operational expenditure for small businesses. By streamlining regulatory requirements and reducing the risk of criminal prosecution for minor lapses, Jan Vishwas 2.0 creates a more enabling environment for entrepreneurship. Moreover, the reform aligns with global best practices, where regulatory frameworks are designed to facilitate business activity while ensuring accountability. By moving towards a predictable and transparent system, India enhances its attractiveness as an investment destination, both for domestic and international investors.
Institutional Efficiency and Reduction in Judicial Burden
Another critical dimension of Jan Vishwas 2.0 is its potential to reduce the burden on India’s judicial system. Currently, millions of cases are pending in courts, a significant proportion of which involve minor procedural or technical violations that do not warrant criminal prosecution. The scale of judicial backlog and regulatory litigation in India highlights the urgency of reforms like Jan Vishwas 2.0. According to data from the National Judicial Data Grid, over 5 crore cases are currently pending across all levels of the judiciary, with subordinate courts accounting for nearly 85–90% of this burden. A significant proportion of these cases relate to minor regulatory or procedural violations, including delays in filings, licensing discrepancies, and technical non-compliance under various economic and commercial laws. Studies indicate that such cases often take several years to resolve, imposing substantial legal and opportunity costs on businesses and individuals alike. Additionally, government entities remain the largest litigants in India, contributing to nearly 50% of all pending cases, many of which arise from regulatory enforcement actions. This not only strains judicial capacity but also reflects inefficiencies within administrative systems. By decriminalising over 700 provisions and shifting enforcement from criminal courts to administrative mechanisms, Jan Vishwas 2.0 has the potential to significantly reduce case inflow into the judiciary. For instance, even a modest 10–15% reduction in new regulatory cases could ease pressure on lower courts and improve overall disposal rates. Furthermore, faster resolution through executive adjudication can reduce compliance uncertainty for businesses, improving investor confidence and economic efficiency. In the long run, such reforms can contribute to strengthening the rule of law by ensuring that judicial resources are focused on serious civil and criminal matters, rather than being consumed by minor technical disputes that can be more effectively resolved outside the traditional court system.
By shifting such cases from criminal courts to administrative or civil mechanisms, the reform can significantly ease judicial congestion. Estimates suggest that India has nearly 50 million pending cases across various courts, with a large number related to regulatory and compliance issues. Redirecting minor cases away from the criminal justice system can free up judicial resources for more serious matters. The reform also introduces mechanisms for faster resolution, including time-bound processes and executive adjudication of penalties. This not only improves efficiency but also enhances trust in the regulatory system. Additionally, by reducing the fear of criminal litigation, the reform encourages businesses to engage more openly with regulatory authorities, fostering a collaborative rather than adversarial relationship.
Industry Engagement and the Role of Stakeholders
The development of Jan Vishwas 2.0 reflects a consultative approach involving multiple stakeholders, including industry bodies, experts, and policymakers. Organizations like the Confederation of Indian Industry (CII) have played a significant role in shaping the reform agenda through sustained engagement and evidence-based recommendations. Industry feedback highlighted the disproportionate nature of criminal penalties for minor offences and the need for a more rational and predictable system. The reform incorporates these insights by introducing proportional penalties, improving clarity in regulations, and ensuring consistency in enforcement. The emphasis on stakeholder engagement also ensures that the reform remains responsive to evolving economic realities. Continuous consultation and feedback mechanisms will be essential to address emerging challenges and refine the regulatory framework over time. Furthermore, civil society and media have a crucial role in ensuring transparency and accountability in implementation. By raising awareness and monitoring outcomes, they can help ensure that the benefits of reform reach the intended stakeholders.
Conclusion
Jan Vishwas 2.0 represents a landmark shift in India’s regulatory philosophy, moving away from a punitive, enforcement-heavy system towards one that prioritises trust, proportionality, and ease of compliance. By decriminalising minor offences, reducing compliance burdens, and improving institutional efficiency, the reform has the potential to transform India’s business environment and governance framework.
However, the success of this initiative will ultimately depend on effective implementation. Strengthening administrative capacity, ensuring uniform enforcement, and maintaining transparency will be critical to achieving the desired outcomes. The broader economic implications of Jan Vishwas 2.0 are equally significant. According to estimates by the World Bank, regulatory uncertainty and compliance inefficiencies can reduce business productivity by up to 20% in emerging economies. In India’s context, where MSMEs contribute nearly 30% to GDP and over 45% to exports, simplifying compliance frameworks can unlock substantial economic potential. By reducing legal risks and transaction costs, the reform is likely to encourage formalisation, increase tax compliance, and attract greater foreign investment. Over time, a trust-based regulatory system could serve as a critical enabler of sustainable economic growth and institutional credibility. In addition, the long-term success of these reforms will depend on continuous monitoring, institutional accountability, and adaptive policymaking. Strengthening digital governance, improving inter-agency coordination, and ensuring uniform implementation across states will be crucial in translating legislative intent into tangible outcomes on the ground, thereby reinforcing trust in India’s regulatory ecosystem.
In a rapidly evolving global economy, regulatory agility is as important as regulatory strength. Jan Vishwas 2.0 positions India on a path towards a more balanced, predictable, and growth-oriented system—one where compliance is driven not by fear, but by trust.
About the Author
Khushbu Ahlawat is a research analyst with a strong academic background in International Relations and Political Science. She has undertaken research projects at Jawaharlal Nehru University, contributing to analytical work on international and regional security issues. Alongside her research experience, she has professional exposure to Human Resources, with involvement in talent acquisition and organizational operations. She holds a Master’s degree in International Relations from Christ University, Bangalore, and a Bachelor’s degree in Political Science from the University of Delhi.
