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The rationale behind decriminalising

economic offences for case of doing business

nion Budget 2023 emphasised the importance Decriminalisation of economic offences is a developing trend
U of improving ease of doing business in India. To in many countries, as a way to improve ease of doing
business. Singapore, for instance, is recognised as a model
help achieve this, several compliance
requirements have been eased and certain
activities that were earlier criminalised have been for ease of doing business, thanks to its streamlined
regulatory framework, efficient government processes, and
decriminalised. support for entrepreneurship and innovation.
To reduce the compliance burden on individuals and
The Intellectual Property Office of Singapore and the
businesses, the Jan Vishwas Bill introduced amendments to
Singapore International Arbitration Centre have been set up
42 Acts including the Indian Post Office Act, 1898;
to address commercial disputes and settle them through
Environment (Protection) Act, 1986; and Information
alternative procedures such as arbitration and mediation.
Technology Act, 2000.
In the US, several states impose civil fines instead of criminal
Decriminalisation should apply to offences that lack
charges for specific economic offences. In California, for
fraudulent or unethical aspects, have no negative impact
instance, white-collar crimes such as securities fraud and
on public interest.
embezzlement attract civil penalties and not criminal
The goal is to create a system in which sanctions are prosecution.
imposed rather than criminal processes, with the latter
reserved for significant contraventions. Decriminalisation of Lighten the load
economic offences in India requires a coordinated strategy The UK has launched measures to reduce the administrative
by the central and state governments. load on businesses, including fewer rules, improved
compliance processes, and simpler access to finance and
Best practices support for enterprises. There are alternatives to criminal
The government of India can take the lead by offering punishment in cases such as violation of the Company
guidelines, best practices, and technical assistance to states Directors Disqualification Act of 1986, which attracts fines
and Union territories. or restrictions on future participation in company
management.
It could also provide financial incentives and other support
to implement the process efficiently. States can engage in
With India climbing from 142nd rank in 2014 to 63rd in 2022
public-private partnerships along with other stakeholders to
in the World Bank’s ‘ease of doing business’ rankings, efforts
ensure that the decriminalisation process is effective, and
are on to achieve further progress. The shift from criminal
meets the needs of businesses and society.
charges to monetary fines for non-compliance is forward-
Lastly, they can enlist judicial institutions and legal experts thinking.
to ensure that the decriminalisation process is fair and
India must continue to focus on reducing compliance
transparent. Legal professionals can assist states and UTs in
requirements while also offering a conducive climate for
developing laws and regulations that are consistent with
foreign investment. (Source: Business Line)
decriminalisation concepts.
50 | 2023 | APRIL | BANKING FINANCE