Introduction

Positive changes are happening in India’s regulatory environment. India is moving from a fear-based approach to one of trust and partnership. The Jan Vishwas Act 2025 is pioneering in this regard as it aims to promote business compliance and economic development.

This new legislation builds upon reforms contained in its 2023 predecessor that decriminalised 183 provisions under 42 central laws. The Jan Vishwas Act 2025 aims to take the efforts of the government for ease of doing business forward by decriminalising over 288 provisions under 16 different central acts. The core philosophy is to reserve strict criminal penalties for serious crimes, but minor, procedural or technical violations should be met with civil penalties. This is a big step in the direction of compliance reforms in India, and with Jan Vishwas Act 2025, a new chapter can be written for enterprises.

Key Provisions of the Act

The Jan Vishwas Act 2025 brings in various drastic changes for the businesses to ease the regulatory compliance burden. The objective is to create a more predictable and less intimidating legal system.

Replacement of Imprisonment: The most notable modification in the Act is the substitution of imprisonment provisions with monetary penalties for several minor, technical, or procedural defaults.
Warn, Correct, penalize: The legislation instills a “warn, correct and then penalize” approach for certain first-time offences, allowing the authorities to issue warnings or advisories instead of imposing penalties.
Graduated Penalties: The Act implements a system of graduated penalties for recurrent breaches of the law, ensuring that the punishment is proportionate to the violation.
Periodic Revision of Fines: The Jan Vishwas Act 2025 states that fines and penalties of a minimum amount will be subjected to revision every 3 years with a 10% increase automatically to ensure they act as an effective deterrent.

Laws Decriminalised

The Jan Vishwas Act 2025 is also extensive, covering businesses in a variety of sectors to achieve a holistic improvement in the business environment. The amendments affect a number of different laws, including:

Drugs and Cosmetics Act, 1940: Certain Offences in the provisions dealing with the manufacture and sale of Ayurvedic, Siddha, or Unani drugs will be decriminalized replacing jail time with higher financial penalties.
Motor Vehicles Act, 1988: Proposed amendments aim to streamline processes for vehicle registration and restore the 30-day grace period for the expiry of a driving license.
MSMED Act, 2006: For first-time contraventions related to information filing, the proposed law, for the first time replaces fines with a simple warning.
Legal Metrology Act, 2009: For certain first-time offences, fines are replaced with warnings in the form of improvement notices.

This widespread decriminalisation corporate law is one of the key components of the Jan Vishwas Act 2025.

Impact on Businesses

The Jan Vishwas Act 2025 is expected to have a remarkable impact on businesses, especially on startups and MSMEs. Since the government aims to foster a trust-based ecosystem, the fear of imprisonment for minor lapses is expected to be removed. This enables entrepreneurs to focus on innovation and expansion instead of dealing with complex and punitive legal hurdles. This positive change of ecosystem in the ease of doing business is likely to improve the confidence of domestic and foreign investors and attracts more foreign direct investment.

Compliance Simplification

One of the objectives of the Jan Vishwas Act 2025 is to simplify the complex web of regulations in India. Businesses in India have to deal with thousands of compliances updates every year which leads to confusion and potential corruption. This piece of legislation is one of the primary components of compliance reforms intending to streamline initiatives. Initiatives like "Digi Locker" for business and "One Nation, One Business" identity system will digitize and simplify record-keeping, drastically reduce the paperwork, and bureaucratic delays. Such measures will improve the overall ease of doing business in the country.

How Lawfinity Helps You Navigate Jan Vishwas 2.0

We know that dealing with large scale legal reforms is no easy task. The Jan Vishwas Act 2025 will open new doors for business, but also comes with new compliance challenges. That is why our team of legal experts are here to help your business adapt seamlessly. We help your company by providing comprehensive advice about the updated legal framework, conduct compliance audits to identify potential risks of the new penalty system, and assisting in revising your internal policies. You will be able to take advantage of the benefits of decriminalisation corporate law, while we help you through these pivotal compliance reforms.