Jan Vishwas and Trust-Based Deregulation

Context

1. The proposed Jan Vishwas Siddhant seeks to overtake India’s regulatory framework by shifting from permission-based controls to trust-based self-regulation.
2. The proposal builds on recent decriminalisation efforts and aligns with the constitutional guarantee of freedom of trade and profession under Article 19.

What is Jan Vishwas Siddhant?

1. Jan Vishwas Siddhant is a regulatory philosophy that replaces prior approvals and excessive controls with trust, transparency, and accountability.
2. The objective is to convert a control-oriented State into a facilitative one.
3. Its core features include:
   1. Perpetual self-registration instead of licences, except in four sensitive areas: national security, public safety, human health, and environment.
   2. A principle of “everything is permitted unless prohibited.”
   3. Risk-based, random, and third-party inspections instead of routine inspector-driven enforcement.
   4. Decriminalisation of business laws, with proportionate civil penalties replacing jail terms.
   5. Digitisation and simplification of filings and compliance systems.
   6. Creation of a single source of truth for all laws, rules, and enforceable obligations through IndiaCode and e-Gazette

Why Is Such a Reform Needed?

1. Historical regulatory legacy
   1. Post-Independence regulations (1956, 1967, 1976) entrenched licence-permit controls.
   2. Partial correction occurred in 1991, but deregulation remained incomplete.
2. Six systemic pathologies hurting entrepreneurship
3. Prior Approval Regime
   19. Innovation should be permissionless, and doing business is a fundamental right under Article 19.
   20. Despite this, businesses face excessive prior approvals: licences, NOCs, permissions, consent orders, etc.
   21. There are around 500 approvals required from central ministries and 3,200+ from state ministries.
4. Instrument Proliferation
   1. Beyond laws and rules, compliance is enforced through circulars, guidelines, SOPs, FAQs, and orders with penal consequences.
   2. Employers must track 12,000+ non-law instruments, creating legal uncertainty.
5. Compliance Blind Spot
   1. Policymakers ignore cumulative compliance burdens.
   2. Regulations should focus on outcomes, not micromanaging every activity or process.
   3. In 2025, India had over 69,000 compliance requirements.
6. Enforcing the Unenforceable
   1. Laws often impose obligations that the State lacks capacity to enforce.
   2. This gap fuels corruption and weakens governance credibility.
7. Process as Punishment
   1. Criminal penalties are rarely enforced but widely used as threats.
   2. Cheque-bounce criminalisation alone accounts for 43 lakh cases, nearly 10% of judicial pendency.
   3. Excessive rules, harsh punishments, low chances of prosecution, and long delays together create an unfair system for innocent people.
8. No Single Source of Truth
   1. There is no single, reliable source for all laws, rules, and compliance requirements.
   2. Entrepreneurs often face corruption because information is outdated, unclear, or unverifiable.

How Jan Vishwas Siddhant Addresses These Problems

1. Replacing licences with self-registration: Removes prior approvals in non-critical sectors.
2. Limiting enforceable instruments: Penal obligations will exist only through laws and rules, not informal executive instruments.
3. Outcome-based regulation: New labour codes have reduced labour‑related compliances by 75%. So, focus shifts from micro-processes to results and impacts.
4. Proportionate penalties: Department for Promotion of Industry and Internal Trade’s (DPIIT’s) decriminalisation principles applied across all business laws.
5. Predictable regulatory transitions: Changes after consultation, with sufficient transition time and a fixed annual implementation date.
6. Single digital legal database: IndiaCode becomes the authoritative source; anything outside it is non-binding.

Implications

1. Boost to entrepreneurship: Reduced regulatory friction lowers entry and scaling barriers.
2. Job creation: Easier business operations support non-farm employment growth.
3. Judicial efficiency: Fewer criminal cases reduce court pendency.
4. Governance quality: Shift from coercive compliance to performance management.
5. Economic scale-up: Addresses why 6.3 crore enterprises yield only 30,000 large companies.

Challenges & Way Forward

Conclusion

Jan Vishwas Siddhant represents a decisive shift from control to trust in India’s regulatory philosophy. By dismantling permission-based governance and restoring constitutional faith in entrepreneurship, it can transform citizens from regulated subjects into empowered economic actors. Its success, however, depends on faithful implementation, institutional discipline, and sustained political commitment.