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Context
The Government is promoting the "Jan Vishwas Siddhant" (Principle of Trust), to empower entrepreneurs and accelerate economic growth by dismantling the "regulatory cholesterol" that has historically impeded business dynamism.
It refers to excessive, complex, and outdated laws, mandatory compliances, and approval procedures that slow down businesses, stifle innovation, and increase operating costs.
This burden under India's global competitiveness and the Viksit Bharat @ 2047 goal.
Excessive Prior Approvals: Excessive business licenses and No-Objection Certificates (NOCs) create high entry barriers—a "permission raj" that violates the constitutional right to conduct business under Article 19(1)(g).
Complex Regulatory Instruments: Beyond formal laws, businesses face thousands of penalizing notifications and circulars, creating a confusing legal environment.
High Compliance Burden: High regulatory compliance demands on manufacturing MSMEs divert resources from core business.
The Process as Punishment: The fear of imprisonment for minor, procedural, or technical lapses acts as a major deterrent for entrepreneurs.
Lack of a Single Source of Truth: A comprehensive, up-to-date digital database of all relevant laws and compliance requirements is unavailable, forcing entrepreneurs to use third-party services to understand their legal obligations.
The Jan Vishwas Siddhant is a transformative framework designed to systematically clear regulatory blockages by placing trust in citizens and entrepreneurs.
Key pillars are:
Self-Registration: Moving away from the licence raj, most business licences will be converted to a one-time, self-registration system. This follows the principle that "everything is permitted until prohibited."
Risk-Based Inspections: Arbitrary "Inspector Raj" will be replaced by a modern system of random, risk-based inspections, which will largely be conducted by accredited third-party agencies.
Decriminalisation & Proportionality: Minor procedural and technical offenses will be decriminalized, substituting imprisonment with proportionate fines. This upholds the principle that punishment must fit the violation.
Digitisation and Single Source of Truth: Compliance filings will be digitized. The IndiaCode portal, integrated with the e-Gazette, is being developed as a single, live, comprehensive digital database of all Acts and rules for stakeholders.
Predictable Regulatory Changes: Future regulatory changes will ensure stability by being implemented only after public consultation, taking effect annually on a fixed date (e.g., January 1st) to allow businesses time to adapt.
Jan Vishwas (Amendment of Provisions) Act, 2023
Decriminalisation of Minor Offences: The Act amended 183 provisions across 42 central laws to remove imprisonment as a penalty for minor, technical, or procedural violations.
Replacement with Monetary Penalties: Instead of criminal prosecution, these offences now attract monetary penalties, which are to be determined by administrative adjudicating officers, reducing the burden on courts.
Proportionality: The reform ensures that the punishment is commensurate with the severity of the offence, preventing harsh penalties for trivial mistakes.
Future Reforms: The government is working on a Jan Vishwas 2.0 Bill, which aims to decriminalise over 350 additional provisions.
Importance of Trust-Based Governance for Economic Growth
Reduces Cost of Compliance: It frees up resources that businesses would otherwise spend on navigating bureaucracy, allowing them to invest in innovation and expansion.
Encourages Entrepreneurship: By removing the fear of imprisonment for minor errors, it encourages more individuals to take calculated risks and start new ventures.
Fosters Innovation: Entrepreneurs can focus on developing products and creating value instead of being preoccupied with excessive paperwork and inspections.
Attracts Investment: A transparent, predictable, and simple regulatory environment boosts investor confidence and makes India a more attractive destination for both domestic and foreign capital.
This approach aligns with the constitutional guarantee of Article 19(1)(g) by creating an environment where the right to do business can be exercised freely, with reasonable and proportionate regulations.
Bureaucratic Resistance: A cultural shift from a control-based to a trust-based mindset within the administrative machinery is essential but challenging.
State-Level Adoption: Since business regulation is a concurrent subject, the uniform and effective implementation by all state governments is crucial for the reform's success.
Capacity Building: Moving to a risk-based, third-party inspection system requires creating a robust ecosystem of credible and competent auditors.
Defining Critical Areas: The four exempted areas (national security, public safety, health, and environment) must be narrowly defined to prevent them from becoming a backdoor for reintroducing a licence raj.
The Jan Vishwas Siddhant is a key governance and economic reform aimed at changing the government's role from a "controller" to an "enabler" of businesses. This framework of trust is considered essential for achieving the vision of Viksit Bharat by 2047, as it is expected to boost small business growth, create non-farm jobs, and liberate Indian entrepreneurs.
Source: INDIANEXPRESS
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PRACTICE QUESTION Q. Trace the regulatory evolution of Indian entrepreneurship from the 1956 Industrial Policy Resolution to the Jan Vishwas reforms. 150 words |
The Jan Vishwas Siddhant (Principle of Trust) is a proposed government policy aimed at transforming India's regulatory environment from a permission-based system ("Licence Raj") to a trust-based one. It focuses on empowering entrepreneurs by reducing compliance burdens and decriminalising minor business offences.
It aims to solve the problem of "regulatory cholesterol," which is the complex and excessive web of approvals, laws, and compliances that slows down business operations, stifles innovation, and increases operational costs for entrepreneurs in India.
"Regulatory cholesterol" is a term used to describe the excessive and complex burden of approvals, compliances, and archaic laws that clog the arteries of business in India. It includes issues like requiring numerous prior approvals, a high compliance burden, and the criminalisation of minor procedural lapses.
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