Gist of Yojana January 2024: Ease of Doing Business

Yojana Magazine is an important source of material for the UPSC exam. The monthly magazine provides details of major government schemes and programmes in various domains. Moreover, coming from the government, it is an authentic source of information for the UPSC Exam. Here, we provide the Gist of Yojana, exclusively for the IAS Exam.

TABLE OF CONTENTS

1. The Jan Vishwas (Amendment of Provisions) Act, 2023 Conception and Development
2. Trusting Citizens Decriminalisation Way
3. Government e-Marketplace (GeM) Leading the Digital Wave
4. Delicate Balance: Regulatory Enforcement & Favourable Business Environment
5. Indo-African Relationship amidst South-South Cooperation

1. The Jan Vishwas (Amendment of Provisions) Act, 2023 Conception and Development

• The ministries in the Centre and the States/UTs have been trying to reduce the compliance burden on businesses and citizens. It can be reduced by decriminalising minor offences.
• In this regard, the idea of a common amendment bill to unify decriminalisation efforts across sectors, saving time for both the judiciary and the legislative department, was put forward by the Hon’ble Prime Minister of India.
• The Jan Vishwas Act, 2023 was initiated to
  • simplify legal processes,
  • reduce compliance burden, and
  • foster a more business-friendly environment.
• It prioritised a balanced legal framework to replace non-harmful and minor criminal offences with administrative actions and civil penalties respectively.
• The coordination across 19 Union Ministries for the Jan Vishwas Act required meticulous planning and clear communication channels. Regular consultations, inter-ministerial meetings, and a shared commitment to regulatory reforms were key to effective coordination. Challenges were addressed through extensive briefings, informal communication channels, and proactive approaches to swiftly resolve concerns, maintaining overall momentum.
• Stakeholder engagement during the formulation of the Jan Vishwas Act involved consultations at the ministry level and comprehensive efforts with industry associations. Regular communication channels were established to understand specific challenges faced by different industries, ensuring a balanced and practical approach. This highlights the government’s commitment towards ease of doing business.
• The Act addressed provisions across 42 Acts administered by 19 ministries, presenting challenges in managing such a comprehensive legislative overhaul. Common directions, a committee, and extensive legal vetting played pivotal roles in ensuring consistency across amendments.
• Aligning the interests and objectives of various ministries was a major challenge during the Act’s development.
  • In this regard, the guidance of the PM and the Cabinet Secretary helped to align the respective amendments of different ministries by providing a common aim and vision.
  • Additionally, a committee comprising CEO NITI Aayog, the Department of Legal Affairs (DoLA), the Department for Promotion of Industry and Internal Trade (DPIIT), and the respective ministries and departments was formed to establish principles guiding the decriminalisation process.
• The Act addresses provisions ranging across 42 Acts administered by 19 ministries.
  • Common directions issued to all respective Ministries helped to address the complexities by setting a unified and cohesive approach.
  • In addition, a committee of representatives from CEO NITI Aayog, the Department of Legal Affairs, and the Department for Promotion of Industry and Internal Trade, helped set common principles serving as a guiding framework.
    • One such principle was to specifically target the general criminal provisions (provisions prescribing punishments for any contraventions applicable across the Act). The strategy was to identify serious contraventions for separate criminalisation while decriminalising minor provisions. For example, the general provision under the Environment Protection Act (Section 15) prescribed punishment for all contraventions under the Act with imprisonment of up to five years. It has been amended under the Jan Vishwas Act, 2023 to be replaced with specified ranges of penalty according to the gravity of offences. The amendments were legally vetted extensively.
  • Inter-ministerial consultations also helped in better collaboration.
• It also reduces the workload of an overburdened judiciary.
  • It achieves this by decriminalising (and replacing them with civil penalties or administrative actions) minor offences involving no harm to the public interest or national security.
  • Severe criminal consequences are no longer attached to minor technical, and procedural defaults.
  • The courts will no longer need to adjudicate upon majority cases originating from 183 provisions across 42 Acts after the implementation of the Jan Vishwas Act.
  • Some legislatures also introduced suitable adjudication mechanisms wherever applicable and feasible. In addition, appellate mechanisms have also been introduced as grievance redressal forums for dissatisfactions arising from decisions of adjudicating officers related to the penalty.

• Presenting the Jan Vishwas Act to the Joint Parliamentary Committee (JPC) involved a meticulous process of addressing considerations and challenges. Transparent communication, detailed presentations, and responsiveness to the committee’s concerns were crucial in accommodating recommendations, except for the retrospective effect, which was deemed not feasible.
  • The Jan Vishwas Act underwent a thorough review by the JPC, which made general recommendations, most of which were accepted by the ministries. Challenges included addressing the JPC’s recommendation on retrospective effect, which was carefully examined and deemed unfeasible.
• Principles and learnings from the Jan Vishwas Act can guide future efforts, such as Jan Vishwas 2.0. These include directions from higher authorities, recommendations from the JPC, and a multifaceted approach to decriminalisation. The Act’s success rested on collaborative efforts, transparency, and a commitment to incorporating valuable feedback into the legislative framework.

2. Trusting Citizens Decriminalisation Way

• The experience of drafting the Jan Vishwas (Amendment of Provisions) Bill, 2023 (Jan Vishwas Bill) was a unique and challenging endeavour for the Legislative Department of India.
• The Jan Vishwas Bill is part of the Indian Prime Minister’s broader vision to trust the people and implement measures aimed at easing living and doing business in the country.
  • It aligns with initiatives such as self-attestation of documents, the creation of a national judicial data grid, and various other reforms in goods and services tax, insolvency, and bankruptcy laws.
  • Notably, the Jan Vishwas law represents a significant shift by converting criminal punishments into monetary penalties, promoting trust-based governance.
• The drafting team faced several challenges in this unprecedented task. With no exact legislative precedents and a diverse range of subjects involved, the team had to navigate uncharted drafting territory.
  • Initially proposed to amend around 30 enactments, the bill ended up amending 42 Central Acts with 182 provisions, spanning pre- and post-independence Acts.
  • The drafting process required collaboration with 19 administrative ministries, vetting 42 draft notes for the Cabinet, and drafting an equal number of Amendment Bills.
• The urgency and timeliness of the task were evident, given the government’s policy agenda focused on the ‘Ease of Living’ and the ‘Ease of Doing Business.’ The decision to draft a single bill covering all amendments to different acts, rather than individual bills, streamlined the process and reduced the burden on the Cabinet.
• The primary objective of the Jan Vishwas Bill is to replace imprisonment with monetary penalties for minor offences, rationalise penalties based on offence gravity, and facilitate adjudication by authorities other than criminal courts.
  • A key innovation involves incorporating provisions for periodic revision of fines and penalties to match inflation, ensuring fairness and proportionality.
• The drafting team also had to address the need for a suitable saving clause, considering the repeal of provisions in various Acts. The clause aimed to ensure that actions taken under the repealed provisions would remain valid.
• The long and short titles of the bill were carefully crafted to reflect the Prime Minister’s vision of ‘decriminalising’ and ‘rationalising’ offences for the ‘Ease of Doing Business.’
• The Jan Vishwas Act, despite being an amending legislation, holds a permanent place in the statute book. Its unique features, including the conversion of imprisonments into monetary penalties and periodic revisions, contribute to its lasting significance. There may be more Jan Vishwas Acts in the future, indicating a potential paradigm shift in trust-based governance and legislative approaches in India.

3. Government e-Marketplace (GeM) Leading the Digital Wave

• Government e-Marketplace (GeM), established in August 2016, is a robust digital portal facilitating end-to-end procurement for Central and State Government departments, organisations, and public sector undertakings (PSUs).
• It provides a paperless, cashless, and contactless ecosystem for government buyers to directly purchase goods and services from sellers across India.
• GeM covers the entire procurement process, from vendor registration to receipt of goods and timely payments.
• The need for a digital solution in public procurement arose due to the challenges of an opaque, time-consuming, and corrupt system that was prone to cartelisation.
  • GeM was envisioned to replace manual processes, making public procurement more efficient, transparent, and inclusive. The platform aimed to establish a competitive marketplace for quality goods and services at reasonable rates.
• GeM’s genesis lies in transforming the public procurement ecosystem through a technologically advanced, digital-only platform. Digitalization has led to higher process efficiencies, improved transparency, reduced cycle times, and increased trust among bidders. The platform supports hassle-free digital transactions, empowering buyers and sellers nationwide.
• Despite challenges, GeM has witnessed significant year-on-year growth. In the first year, it recorded a Gross Merchandise Value (GMV) of ~INR 420 crore. In FY 21-22, transactions grew to INR 1 lakh crore, and in FY 22-23, an 88% growth was achieved, surpassing INR 2 lakh crore worth of GMV. GeM aims to breach the 3 lakh crore GMV mark in FY 23-24.
• Initially, the GeM platform developed a wide range of product categories. But, it rapidly expanded its portfolio to include a large variety of service offerings as well.
  • One of the shining lights in GeM’s success story is the order value in services, with exponential growth over the last 3 years. It witnessed 168% growth in FY 22-23 over the last year. It has received 4.8 lakh service orders valued at more than INR 2 lakh crore since its inception.
• GeM is a category-driven e-marketplace with over 11,600 product categories and 300+ service categories.
• GeM promotes Ease of Doing Business by connecting buyers, sellers, and service providers in a unified platform. The platform’s features include a dynamic goods and services platform, diverse buying modes, contract management, cashless payments, and a trust-based rating system.
• GeM has played a pivotal role in empowering sellers of diverse backgrounds, including MSMEs, startups, women entrepreneurs, artisans, and self-help groups. The platform ensures inclusivity, providing a level playing field in government tenders. GeM Sahay, a mobile application, addresses credit access challenges for MSMEs and startups, offering loans at the point of order acceptance.
• Looking ahead, GeM plans to revamp and upgrade its platform with advanced technologies, focusing on artificial intelligence, machine learning, augmented reality, and virtual reality.
  • The platform aims to enhance user experience, improve transparency, and promote inclusivity in public procurement processes.
  • GeM is committed to expanding its regional footprint, integrating government buyers from all tiers, and prioritising environmentally sustainable products and services to contribute to the country’s net-zero carbon emissions commitment.

4. Delicate Balance: Regulatory Enforcement & Favourable Business Environment

Overview of Jan Vishwas (Amendment of Provisions) Act, 2023:

• The Act marks a monumental shift in India’s regulatory landscape, decriminalizing 183 provisions across 42 Acts administered by 19 ministries.
• Aims to balance regulatory enforcement and create a business-friendly environment, reflecting a departure from conventional approaches.

Penalty Modification for Enhanced Deterrence:

• Substantial modification of penalties replaces imprisonment with higher fines/penalties for various offenses.
• Strategic shift focuses on effective deterrence against violations without disrupting business operations.

Industry’s Demand for Decriminalization:

• Long-standing industry demand for decriminalization to enhance the investment climate.
• Criminal cases against directors for minor operational offenses had created a deterrent effect and hindered businesses from realizing their full potential.

FICCI’s Principles of Decriminalization:

• Directors, especially independent directors, should not be held liable for operational non-compliance.
• Proposes no criminal liability for technical errors, only financial penalties.
• Advocates a graded penalty system for subsequent non-compliance.

Global Alignment in Regulatory Frameworks:

• Act aligns with global trends emphasizing financial consequences over custodial sentences.
• Essential for India’s integration into the global business landscape and showcases commitment to international standards.

Impact on Micro, Small, and Medium Enterprises (MSMEs):

• Act simplifies regulatory frameworks, reducing the burden on MSMEs in day-to-day operations.
• Provides a more level playing field, benefiting MSMEs in competing with global counterparts.

Jan Vishwas 2.0: Recommendations and Considerations:

• FICCI recommends additional considerations for the ongoing Jan Vishwas 2.0 exercise.
• Proposes differentiation between technical lapses and serious offenses.
• Suggests provisions for compounding offenses to streamline compliance and reduce litigation.

Sector-Specific Recommendations:

• Highlights specific sections in labour codes, legal metrology, and environmental laws for modification.
• Advocates revisiting penalties to better align with business interests in these sectors.

Challenges and Solutions:

• Acknowledges challenges at the state level due to overriding central legislation.
• Urges a targeted approach, with major states leading in the decriminalization process to enhance ease of doing business.

Significance of Jan Vishwas (Amendment of Provisions) Act, 2023:

• Recognizes the transformative impact of the Act on creating a more business-friendly environment in India.
• Stresses the need for continuous efforts at both central and state levels to address decriminalization effectively.

Way Forward:

• Encourages states to follow the example of Haryana in initiating the process of decriminalizing certain laws.
• Emphasizes the importance of reducing burdensome compliances to enhance the ease of doing business and living for citizens.

Conclusion:

• The Jan Vishwas (Amendment of Provisions) Act, 2023, stands as a landmark initiative reshaping India’s regulatory approach.
• Ongoing efforts and collaborative action at both central and state levels are imperative for sustaining and expanding the positive impact of decriminalization on businesses and the overall economic landscape.

5. Indo-African Relationship amidst South-South Cooperation

Introduction to Global South Dynamics:

• The Global South emerges as a distinct voice in international multilateralism, representing developing countries’ aspirations for recognition and power.
• Challenges include adverse global terms of trade, limited investment opportunities, sovereign debt concerns, and recent crises like climate change, COVID-19, conflict, and the rising cost of living.

India’s Role in Global South:

• India, as the founder of NAM (Non-Aligned Movement) and an active participant in G77 deliberations, positions itself as a legitimate voice for the Global South.
• Utilizes reputational capital to secure wins in global rule-making and addresses issues of concern to developing nations.

Historical Ties between India and Africa:

• Ancient trade between the Indus Valley and African civilizations documented.
• Maritime interactions between ancient Egypt and Indian rulers through the Indian Ocean established a ‘monsoon culture.’
• Mahatma Gandhi’s moral and political awakening in South Africa solidifies ties with African leaders expressing gratitude for Gandhian ethics.

India’s Contribution to African Development:

• India actively participates in UN peacekeeping missions, supporting newly independent African states.
• Bandung Conference marks a milestone in South-South Cooperation (SSC), challenging Northern-dominated systems.

Indo-African Cooperation Dynamics:

• Focus on UN Security Council reforms, health equity, climate justice, and energy security strengthens bilateral and plurilateral engagements.
• Engagement extends to regional organizations, including ECOWAS, the African Continental Free Trade Agreement, BRICS, OIC, ADB, NDB, and more.

Economic and Trade Relations:

• Trade volume records a fourteen-fold increase between 2001 and 2013.
• India has become one of the top 5 investors in Africa with a hybrid engagement strategy.
• Trade diversification, private investments, and initiatives like the India-Africa Partnership Project contribute to reaching $100 billion in trade by 2022-23.

Developmental Initiatives and Investment:

• Initiatives like Exim Bank’s Focus Africa Programme and India-Africa Partnership Project promote development.
• Comprehensive economic cooperation agreements, trade pacts, and investment in various sectors contribute to mutual growth.

South-South Cooperation Strategies:

• South-South Cooperation (SSC) evolves as a rule-maker, challenging traditional power dynamics.
• Triangular cooperation frameworks, such as g7+, aim for mutual benefit and shared goals.

Prescriptions for Enhanced Cooperation:

• Focus on building productive capacities, especially in agriculture, food security, and rural development.
• Strengthen governance standards, improve human and social development through aid and investments, and explore debt-for-nature swap agreements.

Challenges and Future Initiatives:

• Challenges include trade issues, political instability, logistics costs, and securitization of African resources.
• Future initiatives should be result-driven, demand-driven, and context-agnostic, focusing on human resources, knowledge, technology, and sustainability.

Role of South-South Cooperation in Global Development:

• South-South Cooperation should be proactive in aligning with national systems and achieving global targets like SDGs and MDGs.
• Collaboration networks must deepen to avoid fragmentation and maximize the benefits of aid.

Conclusion:

• Indo-African relations, embedded in the principles of South-South Cooperation, have evolved into a strategic partnership with economic, trade, and developmental dimensions.
• The future requires continued efforts towards mutual growth, addressing challenges, and fostering deeper cooperation in the evolving landscape of global development.