The introduction of the Jan Vishwas Bill 2.0 in Parliament on 18 August 2025 is being hailed as a milestone in India’s attempt to shift towards trust-based governance.
The bill is meant to foster greater trust in citizens and businesses, reduce the burden of criminalisation for minor infractions, and create an environment that encourages entrepreneurship and investment.
It has now been referred to a Select Committee of the Lok Sabha for deeper scrutiny. This bill promises to decriminalise 288 provisions across 16 central laws in an effort to make India a more attractive manufacturing and investment destination.
If successful, it could bolster the “Make in India” initiative and accelerate the journey towards transforming the country into a global manufacturing hub.
The question, however, is not simply whether easing punitive provisions will improve the business environment, but whether the shift from criminal penalties to financial fines will strengthen efficiency or inadvertently open the doors to corruption and lax compliance. Supporters argue that the bill embodies a more modern and humane philosophy of regulation - “warn, correct and then penalize.”
Instead of treating every minor error as a crime, the law seeks to assume good faith and treat mistakes as lapses to be corrected, reserving harsher consequences for repeat or wilful violations. This is not only a pragmatic approach to governance but also a reflection of a maturing democracy that chooses reform over fear. By decriminalising minor offences, courts will be freed to focus on serious crimes, while businesses will be spared the constant dread of criminal prosecution for technical lapses.
Take, for instance, the Drugs and Cosmetics Act, 1940. Under the existing law, violations involving the manufacture or sale of Ayurvedic, Siddha, or Unani medicines could attract up to six months of imprisonment alongside fines. The Jan Vishwas Bill proposes to scrap the jail clause, replacing it with a significantly higher financial penalty of at least Rs 30,000.
The logic is clear: deterrence need not always involve jail terms; a steep monetary penalty can achieve compliance without clogging courts or intimidating small manufacturers.
Similarly, in the Central Silk Board Act, 1948, furnishing a false statement even if an innocent clerical error, was previously a criminal offence with up to one year of imprisonment. Under the new framework, the first instance would attract only a warning, while repeat offences would incur a penalty of Rs 25,000 to Rs 1 lakh, replacing the outdated Rs 1,000 fine. The message is that mistakes should not automatically criminalise individuals, but repeated negligence will come at a heavy price.
This shift in policy philosophy provides businesses with a greater sense of predictability. The approach reflects the government’s recognition that a climate of fear is not conducive to investment and growth. For many micro, small, and medium enterprises (MSMEs), this could be a game-changer, encouraging risk-taking and innovation. After all, for a small entrepreneur, the fear of imprisonment often discourages even legitimate business ventures.
Yet, the optimism surrounding the bill is tempered by serious concerns. Critics argue that the removal of criminal penalties could embolden the wealthy or large corporations to treat fines as little more than a cost of doing business.
For instance, under the Air (Prevention and Control of Pollution) Act, 1981, polluting industries once faced the possibility of criminal prosecution and imprisonment. Under the new dispensation, penalties may be reduced to monetary fines. While a small factory may struggle with such fines, a multinational corporation with deep pockets could treat them as an insignificant expense, continuing to pollute with impunity.
Similar fears extend to worker safety and labour rights. A company faced with the choice between costly safety upgrades and paying a fine may choose the latter, effectively “paying to endanger” its workers. In such cases, monetary penalties could fail to serve as a meaningful deterrent, particularly when weighed against the potential profits at stake. The bill’s selective coverage is another weakness. It addresses 16 central laws, but there remain thousands of statutes across diverse sectors from mining to plantations that still carry criminal penalties for minor administrative violations. Without a comprehensive review of all such laws, the reforms risk being piecemeal, leaving large gaps in the regulatory architecture.
Critics also highlight the dangers of shifting adjudication from courts to administrative officers. While this may speed up enforcement, it risks creating a less transparent system vulnerable to discretion and corruption. Decisions that should be based on legal principles could instead be influenced by administrative convenience or worse, personal biases. For foreign investors, this may reduce clarity rather than enhance it. Transparency and predictability are central to trust in governance, and any perception of opacity could undermine the bill’s stated goals.
The government appears to be betting on the idea that monetary penalties, if substantial and strictly enforced, can prove more effective than jail time. Many repeat offenders, especially those unfazed by short prison terms, may think twice when faced with the prospect of hefty financial losses. By embedding automatic revisions of fines every three years to account for inflation, the bill also ensures that penalties retain their sting over time rather than becoming outdated and ineffective.
The effectiveness of the “warn, correct, and then penalize” model, however, depends heavily on enforcement. A warning only makes sense if subsequent violations are closely monitored and punished without exceptions. If fines are not diligently imposed, or if enforcement is lax, the deterrent effect will collapse, leaving the system weaker than before.
In our view, the Jan Vishwas Bill 2.0 is a bold step in the right direction, but it is no panacea. By reducing the criminalisation of technical errors, it lowers barriers for small entrepreneurs and signals trust in citizens. Yet, unless its implementation is matched with robust oversight and expansion to cover more laws, it risks replacing one set of inefficiencies with another. The bill must not be seen as a final destination but as a crucial beginning in a broader journey of reform.
(The author is Assistant Professor, Shyam Lal College (M), University of Delhi/ Visiting Sr. Fellow, Pahle India Foundation, Delhi. Views are personal.)