Union Budget 2025: Key Reforms to Boost Ease of Doing Business and Attract Investment
In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman unveiled two significant initiatives aimed at promoting ease of doing business, boosting investor confidence, and fostering economic growth. These are the Jan Vishwas Bill 2.0 and the launch of an Investment Friendly Index of States—both of which will play a crucial role in improving India's business environment.
Jan Vishwas Bill 2.0: A Step Towards Decriminalizing Business Provisions
The government is set to introduce the Jan Vishwas Bill 2.0, a comprehensive reform designed to simplify the regulatory landscape and decriminalize over 100 provisions that are currently hindering the ease of doing business in India.
The Jan Vishwas Bill, initially introduced in the previous year, is part of the government’s ongoing efforts to address the concerns of businesses and entrepreneurs who often face cumbersome procedures, legal hurdles, and penalties for non-compliance with minor regulatory infractions. The second version of the Bill expands upon this by focusing on provisions that criminalize simple business mistakes or non-compliance with regulations that do not pose significant harm.
*Key Features of the Jan Vishwas Bill 2.0:
1.Decriminalization of Over 100 Provisions:
The Bill will target over 100 provisions that criminalize minor business violations. By reducing criminal liability for such offenses, the government aims to provide a more lenient approach to business regulation, helping businesses focus on growth rather than fearing legal action for minor infractions.
2.Focus on Minor Violations:
Instead of penalizing business owners with criminal cases for minor regulatory violations, the Bill will propose penalties and fines as an alternative, which will be more conducive to the business environment.
Encouragement of Investment and Innovation:
The Jan Vishwas Bill 2.0 is designed to make India a more attractive destination for both domestic and foreign investment. By reducing the fear of criminal action for small errors, the government hopes to encourage more innovation and risk-taking, which are essential for business growth.
3.Simplified Compliance:
The Bill will make compliance easier for businesses, especially small and medium-sized enterprises (SMEs), which often struggle with complex regulations. This will help them scale up and grow without the burden of cumbersome bureaucratic processes.
Investment Friendly Index of States: A New Initiative to Promote Competition
The government also announced the launch of the Investment Friendly Index of States in 2025. This new initiative will rank states based on their business environment, investment infrastructure, and the ease of doing business within their territories. The aim is to incentivize states to adopt reforms that improve their competitiveness and attract investment.
*Key Features of the Investment Friendly Index:
1.Ranking of States:
States will be evaluated based on a range of criteria including infrastructure, legal and regulatory frameworks, ease of starting and running a business, availability of skilled labor, and other investment-friendly policies. This will create a competitive environment among states to enhance their business climates.
2.Encouraging State-Level Reforms:
The index will act as a tool for states to benchmark their performance and identify areas for improvement. States will be motivated to adopt pro-business reforms to attract investment, thereby contributing to regional economic growth and employment generation.
3.Fostering Investment Across the Country:
By introducing an index that promotes healthy competition among states, the government aims to ensure that all regions of India benefit from increased investment, leading to more balanced regional growth. This initiative will also encourage state governments to work on improving their infrastructure and regulatory frameworks to attract both domestic and international investors.
Conclusion:
The Jan Vishwas Bill 2.0 and the Investment Friendly Index of States are both forward-thinking initiatives that signal the government's commitment to making India an even more attractive place for investment. By decriminalizing minor regulatory offenses and fostering competition among states to improve their business environments, India is taking important steps towards becoming a global business hub.
These reforms, when fully implemented, are expected to enhance India's position on global investment indices, attract more foreign direct investment (FDI), and create an ecosystem where businesses can thrive.
Stay tuned for more details as the Union Budget 2025 continues to shape the future of India’s economy.
