Introduction to Jan Vishwas 2.0

Jan Vishwas 2.0 is a regulatory reform initiative launched in 2023 by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry. It aims to simplify over 1,200 compliances across various sectors by adopting a trust-based compliance framework, reducing procedural burdens primarily for Micro, Small and Medium Enterprises (MSMEs). The scheme operationalizes provisions under the Companies Act, 2013 (notably Sections 447 and 448 on penalties and compounding offences), the Micro, Small and Medium Enterprises Development Act, 2006, and complements the Insolvency and Bankruptcy Code, 2016. It forms part of the broader regulatory reforms under the Regulatory Reform Act, 2015 and the ongoing Ease of Doing Business agenda.

Legal and Constitutional Foundations

Jan Vishwas 2.0 aligns with Article 19(1)(g) of the Constitution of India, which guarantees the right to practice any profession or carry on any occupation, trade, or business. By simplifying compliance, it reduces barriers to the exercise of this right. The scheme leverages Sections 447 and 448 of the Companies Act, 2013, which deal with penalties for offences and allow for compounding of certain offences, thus reducing litigation and procedural delays. It also supports provisions under the Micro, Small and Medium Enterprises Development Act, 2006, facilitating easier registration and compliance for MSMEs. Moreover, Jan Vishwas 2.0 complements the Insolvency and Bankruptcy Code, 2016 by promoting timely dispute resolution, which is critical for unlocking stuck capital and improving business confidence.

• Article 19(1)(g): Right to carry on business
• Companies Act, 2013: Sections 447 (penalties), 448 (compounding offences)
• MSME Development Act, 2006: Simplified compliance for MSMEs
• Insolvency and Bankruptcy Code, 2016: Supports dispute resolution
• Regulatory Reform Act, 2015: Framework for regulatory simplification

Economic Impact and Sectoral Significance

Jan Vishwas 2.0 targets an estimated annual compliance cost reduction of over INR 3,000 crore for MSMEs, which constitute over 63 million enterprises contributing approximately 30% of India’s GDP and 45% of exports (MSME Ministry Annual Report, 2023). By simplifying compliance and reducing procedural delays, the scheme is expected to unlock around INR 50,000 crore in stuck capital, as per the Economic Survey 2023-24. The initiative also aims to improve India’s position in the World Bank’s Ease of Doing Business Index from 63rd in 2020 to below 50 by 2025. The budgetary allocation for DPIIT’s regulatory reforms increased by 15% to INR 120 crore in FY 2023-24, underscoring government commitment. Additionally, the trust-based approach is projected to reduce litigation related to regulatory non-compliance by 20% over the next three years (NITI Aayog, 2023).

• INR 3,000 crore annual compliance cost savings for MSMEs
• Unlocking INR 50,000 crore stuck capital through faster dispute resolution
• MSMEs: 63 million units, 30% GDP, 45% exports
• Improvement in Ease of Doing Business rank from 63 (2020) to below 50 (target 2025)
• 15% budget increase for DPIIT regulatory reforms in FY 2023-24
• 20% projected reduction in litigation related to compliance (NITI Aayog, 2023)

Institutional Roles and Coordination

Implementation of Jan Vishwas 2.0 involves multiple institutions. The DPIIT leads regulatory reforms and policy design. The Ministry of Corporate Affairs (MCA) oversees compliance simplification under the Companies Act. The Ministry of Micro, Small and Medium Enterprises (MSME Ministry) is both a beneficiary and stakeholder, facilitating MSME-specific reforms. The NITI Aayog provides policy advisory and monitors impact metrics such as litigation rates and compliance costs. The Central Board of Indirect Taxes and Customs (CBIC) plays a role in simplifying tax-related compliance, complementing the trust-based framework.

• DPIIT: Policy formulation and implementation
• MCA: Corporate compliance simplification
• MSME Ministry: Stakeholder engagement and facilitation
• NITI Aayog: Monitoring and policy advice
• CBIC: Tax compliance simplification

Comparison with Singapore’s Trust-Based Regulatory Model

Singapore’s regulatory framework, especially its 'Regulatory Sandbox' launched in 2016, offers a benchmark for trust-based compliance. The Sandbox allows startups to experiment with innovative products under relaxed regulatory conditions, reducing compliance costs by 25% and propelling Singapore to 2nd place globally in the Ease of Doing Business rankings (World Bank, 2023). This model fosters innovation and economic growth by balancing regulatory oversight with trust and flexibility.

Critical Gaps in Jan Vishwas 2.0

Despite significant simplification, Jan Vishwas 2.0 lacks a fully integrated digital grievance redressal mechanism across all regulatory bodies. This gap limits real-time dispute resolution and undermines the trust-based compliance model’s effectiveness. Fragmented grievance handling prolongs delays, deters compliance, and weakens stakeholders’ confidence. Strengthening digital integration and interoperability among agencies remains essential for achieving the scheme’s full potential.

• Absence of unified digital grievance redressal platform
• Limited real-time dispute resolution capabilities
• Fragmented regulatory communication hinders trust
• Need for interoperability across agencies

Significance and Way Forward

Jan Vishwas 2.0 marks a decisive shift from punitive to trust-based regulatory compliance in India, easing business operations and enhancing governance transparency. To consolidate gains, the government must prioritize:

• Developing an integrated digital grievance redressal system across regulatory bodies
• Expanding the trust-based approach to additional sectors beyond MSMEs
• Enhancing capacity building within institutions for proactive compliance monitoring
• Leveraging data analytics for predictive compliance and risk management
• Learning from international best practices such as Singapore’s Regulatory Sandbox

Jharkhand & JPSC Relevance

• JPSC Paper: Paper 2 - Governance and Economic Development
• Jharkhand Angle: Jharkhand hosts a significant number of MSMEs contributing to state GDP; Jan Vishwas 2.0’s compliance simplification can boost local entrepreneurship and industrial growth.
• Mains Pointer: Highlight how reduced regulatory burden under Jan Vishwas 2.0 can improve MSME performance in Jharkhand, linking it to state-level ease of doing business initiatives.