Business

Published: Feb 23, 2023
Updated: Feb 23, 2023

India's Ease of Doing Business to Soar with Compliance Reduction and Decriminalization of Legal Provisions

India's ranking in the Ease of Doing Business report by The World Bank has improved significantly, from 142nd in 2014 to 63rd in 2022. The government's efforts to reduce compliance burden on companies and individuals have contributed significantly to this improvement. With the Union Budget 23-24 announcing further steps towards compliance reduction and decriminalization of legal provisions, India's ease of doing business is set to soar.

Compliance Reduction and Decriminalization to Foster Ease of Doing Business:

The Indian government has taken committed efforts to ease the compliance burden and relax punishments for non-compliances. This has been achieved by shifting penalties for non-compliances from criminal charges to monetary fines. The move has significantly reduced fear among companies and officers of being imprisoned for minor offences. Moreover, this has reduced the burden on the already burdened judicial system to hear and award criminal punishments. The proposed reduction of more than 39,000 compliances under several legislations and the de-criminalization of more than 3,400 legal provisions in the Union Budget 23-24 will further enhance India's ease of doing business.

Jan Viswas (Amendment of Provisions) Bill, 2022:

To reduce the compliance burden on individuals and businesses and ensure ease of doing business, the Jan Viswas (Amendment of Provisions) Bill, 2022 proposes to amend 42 Acts. These Acts cover various aspects such as environment protection, agriculture, forest, air pollution, drugs and pharmacy, IPR laws, banking companies, motor vehicles, railways, metro rails, cable TV network, information technology, prevention of money laundering, etc. Unlike earlier efforts to de-criminalize certain specific and limited Acts, this Bill goes very far and wide in moving from a criminal punishment regime to a more acceptable monetary fines approach.

Balanced Environment of Compliances:

The right balance must be struck in imposing penalties for non-compliances. De-criminalization of trivial offences is a step in the right direction. This will surely ease of doing business in India. Implementation of laws is the bedrock of the legal framework, and violators must have a fear of non-compliance in their minds. Punishments must commensurate with the nature of the offence to build a conducive and balanced environment of compliances.

Reduced Compliance burden will help MSMEs flourish and foster innovative practices

The Indian government's committed efforts to reduce the compliance burden on individuals and businesses and relax punishments for non-compliances have significantly improved India's ease of doing business. The proposed reduction of compliances and de-criminalization of legal provisions will further enhance India's ranking and make it a preferred destination for foreign investment. The Jan Viswas (Amendment of Provisions) Bill, 2022 proposes to amend 42 Acts to reduce compliance burden and ensure ease of doing business. The right balance must be struck in imposing penalties for non-compliances to build a conducive and balanced environment of compliances.