Topic-1: Jan Vishwas (Amendment of Provisions) Act, 2023
Question: Discuss the key proposals of the Jan Vishwas Act, including the decriminalization of offenses, replacement of imprisonment with monetary fines, establishment of grievance redressal mechanisms, and periodic increase in fines and penalties.
Background and Purpose
- The Jan Vishwas (Amendment of Provisions) Act aims to redefine India’s regulatory landscape.
- Introduced by the Ministry of Commerce and Industry, it seeks to:
- Decriminalize minor offenses across 42 Acts (environment, agriculture, media, etc.)
- Reduce compliance burden for businesses
- Promote ease of living and doing business
Key Proposals
- Decriminalize 180 offenses across various sectors.
- Replace imprisonment with monetary fines for most offenses.
- Remove all offenses and penalties under the Indian Post Office Act, 1898.
- Allow compounding of certain offenses (settlement without court involvement).
- Establish grievance redressal mechanisms and appoint Adjudicating Officers for penalties.
- Increase fines and penalties periodically (10% every 3 years).
Targeted Acts (Examples)
- The Indian Forest Act, 1927
- The Air (Prevention and Control of Pollution) Act, 1981
- The Information Technology Act, 2000
- The Environment (Protection) Act, 1986
- The Motor Vehicles Act, 1988
- The Food Safety and Standards Act, 2006
Justification for the Bill
- MSMEs (Micro, Small & Medium Enterprises) are crucial to the Indian economy.
- Excessive regulations (1536 laws, 70,000 compliances) hinder MSME growth.
- The Bill aims to streamline regulations and reduce red tape.
- It aims to encourage formalization, job creation, and economic growth.
Significance of the Bill
- Reduces compliance burden for businesses, improving ease of doing business.
- Expedites investment decisions due to smoother processes.
- Reduces judicial workload by diverting cases from courts (3.3 crore out of 4.4 crore pending cases are criminal).
- Promotes “trust-based governance” by simplifying regulations.
Concerns and Criticisms
- Replacing imprisonment with fines might not be a true deterrent, especially for environmental crimes.
- Adjudicating Officers might lack expertise for complex environmental penalties.
- Removal of some offenses (theft, postal article misappropriation) is unrelated to the Bill’s core objective.
Topic-2: Government E-Marketplace (GeM)
Question: Discuss the need for a digital solution like GeM, highlighting the inefficiencies and challenges of the old procurement system and the benefits offered by GeM in terms of transparency, efficiency, and cost savings.
What is GeM?
- Launched in August 2016, GeM is a robust digital platform for government procurement.
- It facilitates a paperless, cashless, contactless ecosystem for government purchases.
- GeM covers the entire procurement process, from vendor registration to payment.
Need for a Digital Solution
- The old system was opaque, slow, and prone to corruption.
- GeM aims for transparency, efficiency, ease of doing business, and competitive pricing.
Benefits of GeM
- Increased efficiency, information sharing, transparency, and trust among bidders.
- Greater competition leading to cost savings.
- Largest digital transformation project by a government globally.
Growth of GeM
- Despite challenges, GeM has seen significant year-on-year growth.
- Gross Merchandise Value (GMV):
- FY 2016-17: INR 420 crore
- FY 2020-21: INR 38,000 crore
- FY 2021-22: INR 1 lakh crore
- FY 2022-23: INR 2 lakh crore (88% growth)
- GeM offers over 11,600 product categories and 300+ service categories.
GeM: Promoting Ease of Doing Business
- Connects buyers, sellers, and service providers on a unified platform.
Transformations through GeM
- Cost reduction and efficiency.
- Inclusive empowerment of sellers, including women entrepreneurs.
- Seamless registration process.
- Diverse buying modes (direct purchase, bidding, auctions, etc.).
- Contract management with auto-generated contracts.
- Cashless payments and timely transactions.
- Increased visibility for small businesses and startups.
- Aligns with ‘Make in India’ initiative by highlighting domestic content.
- Trust-based rating system.
- Demand forecasting based on historical data.
- Tools to help buyers establish price reasonableness.
- User training and support.
- Standardized communication channels.
- Responsive contact center with multilingual support.
- Dispute resolution features (Vivad se Vishwas-II).
- AI/ML-based decision support for anomaly and fraud reduction.
GeM Sahay
- Mobile application offering frictionless financing for MSMEs and startups.
Next-Gen GeM Platform
- Partnership with Tata Consultancy Services to develop a new platform using cutting-edge technologies.
- Aims for improved user experience, transparency, and inclusivity.
Future Roadmap
- Leverage AI/ML for fraud detection, data analytics, and supply chain management.
- Expand the catalog of ‘Green’ products and services to support sustainability goals.
Conclusion
- GeM is continuously evolving to improve user experience, transparency, and inclusivity in public procurement through new technologies.
Topic-3: GST and Ease of Doing Business
Question: Evaluate the ease of registration under GST, including the PAN-based and state-specific registration process and the threshold limits for registration for goods and services.
Introduction
- Goods and Services Tax (GST) is a major tax reform promoting “One Nation, One Tax, One Market.”
- It subsumed various central and state levies, creating an integrated national economy.
- GST has seen significant growth:
- Tax base nearly doubled since inception (from 67.8 lakh to 1.4 crore)
- Highest monthly GST revenue collection (April 2023: Rs 1,87,035 crore)
How GST Promotes Ease of Doing Business
- GST focuses on reducing compliance burden and ensuring a smooth flow of goods across states.
- It achieves this through:
- Harmonization of laws, procedures, tax rates, and definitions.
- Online processes for registration, returns, refunds, etc. (GSTN portal).
Ease of Registration
- GST registration is PAN-based and state-specific.
- Threshold for registration:
- Goods: Rs 40 lakh annual turnover (Rs 20 lakh in some states)
- Services: Rs 20 lakh annual turnover (Rs 10 lakh in some states)
Simplified Return Filing
- Various online returns are required:
- GSTR-1 (outward supply)
- GSTR-2A/2B (auto-populated inward supply)
- GSTR-3B (tax payment)
- GSTR-9 (annual return)
- System calculates late fees and interest for delayed filing.
- Filing exemptions for small businesses:
- GSTR-9 waived off for turnover up to Rs 2 crore
- GSTR-9C waived off for turnover up to Rs 5 crore
E-Way Bill
- Required document for transporting goods (details sender, receiver, transporter, etc.).
- Facilitates faster movement, reduces costs, eliminates check posts.
E-Invoicing
- Mandatory for businesses with over Rs 5 crore annual turnover.
- Standardizes invoices, reduces disputes, improves payment cycles, and boosts efficiency.
Timely Refunds
- Crucial for working capital and business expansion.
- Standardized, simplified, and time-bound online refund process.
- Exporters receive provisional refunds (90%) within 7 days.
Other Trade-Friendly Initiatives
- Reduced interest on wrongly availed Input Tax Credit (ITC).
- Higher refunds for inverted duty structure.
- Registration exemption for small e-commerce suppliers.
- Transfer of unutilized cash balances between businesses.
- UPI and IMPS payment options for GST.
- Option to withdraw appeals and restore attached property.
- Decriminalization of certain GST sections.
Impact on Ease of Doing Business Ranking
- GST is a key factor in India’s rise in the World Bank’s Ease of Doing Business Index:
- 2014: 142nd
- 2018: 77th
- 2019: 63rd
Conclusion
- Despite initial challenges, GST is seen as a positive reform for ease of doing business and supply chain efficiency.
- The government is continuously working to improve the GST regime and make it more equitable and effective.
Topic-4: Decriminalization – India’s Push for Ease of Doing Business
Question : Explain the objectives of the Jan Vishwas (Amendment of Provisions) Act, 2023, highlighting its focus on decriminalizing minor offenses and promoting ease of doing business in India.
Jan Vishwas (Amendment of Provisions) Act, 2023
- Aims to decriminalize minor offenses and promote ease of doing business.
- Focuses on “trust-based governance” and reduces burden on the judicial system.
Impact on Businesses
- Decriminalization removes the threat of imprisonment for minor offenses.
- Replaces imprisonment with fines, eliminating lengthy court trials.
- This benefits businesses in several acts including:
- Pharmacy Act, 1948
- Copyright Act, 1957
- Patents Act, 1970
- Environment (Protection) Act, 1986
- Motor Vehicles Act, 1988
- Many more
Benefits
- Saves businesses from time-consuming legal trials.
- Reduces case pendency in overburdened courts.
Background
- The decriminalization journey began with amendments to the Companies Act.
- The Jan Vishwas Act is a significant step forward.
Conclusion
- Balancing ease of doing business with deterrence for serious offenses is crucial.
- Responsible decriminalization is necessary, not blanket overhauls.
Topic-5: Balancing Regulatory Enforcement and Business Environment
Jan Vishwas Act and Penalty System
- Replaces imprisonment with fines for many offenses.
- Aims to create a deterrent effect without harming businesses.
FICCI’s Decriminalization Principles
- Exempt directors (especially independent directors) from liability for operational issues.
- Impose financial penalties for technical errors/lapses, not criminal charges.
- No criminal charges for first-time offenses under most laws.
- Implement a graded penalty system for repeat offenses.
- Establish “mens rea” (guilty mind) requirement for offenses.
Recommendations
- Monetary penalties only for technical lapses (recordkeeping, returns, etc.) with increased fines for repeat offenses.
- Monetary penalties (with potential increases) for first-time offenses.
- Allow “compounding” (settlement without court) for offenses with subsequent compliance.
Impact on Businesses
- Reduces disruption caused by criminal prosecutions.
Examples
- Occupational Safety, Health and Working Conditions Code: Sections 94, 96, and 97 – decriminalized with higher penalties.
- Legal Metrology Act, 2009: Section 36 (penalty for non-standard packages) – not decriminalized, needs revision.
Labor Codes
- Some new codes (e.g., Occupational Health, Safety, and Working Conditions Code) retain criminal penalties.
Way Forward
- Address decriminalization at the state level.
- Identify central acts for decriminalization that will influence state laws.
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