Confidence Building Measures for Business through Jan Vishwas Law

INVOCATION OF ‘animal spirits’ in businessmen and entrepreneurs has been the cherished quest of all governments. It is imperative to promote investments and fire up demand – both essential for promoting economic growth.

- Raghav chandra

What has hitherto held this back is the perception of acute vulnerability by businesses – that even the smallest infraction, no matter how involuntary, can land them in jail. The Jan Vishwas law is meant to assuage such apprehensions. The provision of criminal liability embedded in many laws was an offshoot of a colonial mindset, that persisted even post-independence – viewing private enterprise with suspicion. We are now undoing the shackles of the past and making a brand-new beginning in the right direction.

A total of 183 provisions will be decriminalised in as many as 42 Central Acts administered by 19 ministries and departments. Decriminalisation is proposed to be achieved either through removal of the imprisonment penalty completely or by converting it into a monetary-fine based compounding provision. An attempt is also being made to ensure that the degree of punishment is commensurate with the severity of the offence.

Removal of penal provisions with the imprisonment clause will also be positive news for companies that are presently confronted by the scourge of notices that carry threats of arrests of their key management personnel for the slightest default. Notices to directors ultimately affect the public global image of the company, especially with stringent SEBI listing obligations and disclosure guidelines.

Not just private enterprise, but the logjam of more than 50 million cases in judicial pendency will be the biggest beneficiary of this new dispensation. Currently, criminal consequences prescribed for technical/procedural lapses and minor defaults compel the justice delivery system to be clogged as companies