Gujarat's Jan Vishwas Bill - Naveen Publications

Executive Summary

Gujarat has made a groundbreaking move by passing the Gujarat Jan Vishwas (Amendment of Provisions) Bill 2025, decriminalizing 516 minor offences across 11 laws under six state departments. This transformative legislation replaces imprisonment and criminal penalties with monetary fines for technical violations, marking a paradigm shift from punitive to trust-based governance. The bill directly addresses filing delays, license renewals, unauthorized construction, and minor safety violations that previously carried the threat of criminal prosecution.

Industries Minister Balvantsinh Rajput emphasized that this reform will particularly benefit MSMEs and startups by removing the fear of criminal litigation for minor lapses. The legislation follows the Central Government’s Jan Vishwas Act 2.0 framework, under which over 40,000 compliances have been eliminated nationwide. Gujarat now leads states in the number of decriminalized provisions, reinforcing its position as India’s premier business destination.

The Legislative Framework: Understanding Gujarat's Jan Vishwas Bill

Scope and Scale of Reforms

The Gujarat Jan Vishwas Bill represents one of the most comprehensive state-level decriminalization initiatives in India. The legislation targets 516 specific provisions across multiple departments:

Urban Development and Housing
Labour, Skill Development and Employment
Narmada, Water Resources, Water Supply and Kalpsar
Industries and Mines
Agriculture, Farmer Welfare and Cooperation
Finance Department

The reform categorizes changes into three distinct approaches: one provision with imprisonment has been completely eliminated, 17 provisions that previously included imprisonment or fines have been converted to penalty-based systems, and 498 provisions with existing fines have been restructured as administrative penalties.

Key Legislative Changes

The bill amends critical state laws including the Gujarat Co-operative Societies Act 1961, Gujarat Town Planning and Urban Development Act 1976, Gujarat Municipalities Act 1963, and eight other significant pieces of legislation. Under the new framework, violations such as unauthorized construction will attract fines ranging from ₹1,000 to ₹50,000 per day instead of criminal proceedings, while false advertising in cooperative societies will incur penalties between ₹5,000 and ₹50,000.

Building on Central Government Success

Gujarat’s initiative directly builds upon the Central Jan Vishwas Act 2023, which successfully decriminalized 183 provisions across 42 Central Acts administered by 19 ministries. The state government conducted extensive consultations with stakeholders before drafting the legislation, ensuring alignment with both national policy and local business needs.

The timing is particularly significant as the Central Government has introduced Jan Vishwas Bill 2.0 in 2025, proposing amendments to 355 provisions across 16 Central Acts. This coordinated approach between central and state governments creates a comprehensive framework for regulatory simplification across India.

Impact on Business Ecosystem and Entrepreneurship

Transforming the MSME Landscape

The legislation specifically targets challenges faced by Micro, Small, and Medium Enterprises (MSMEs), which constitute over 35 lakh enterprises in Gujarat. Previously, business owners faced the constant threat of criminal prosecution for minor compliance failures, creating a climate of fear that stifled entrepreneurial risk-taking.

Under the new framework, businesses can operate with greater confidence, knowing that procedural lapses will result in predictable monetary penalties rather than criminal charges. This shift is particularly crucial for startups and emerging enterprises that often lack the resources for comprehensive legal compliance teams.

Reducing Compliance Burden

The reform addresses Gujarat’s commitment to reducing regulatory complexity. The state has already eased the burden of complying with approximately 2,900 rules across various services. The Jan Vishwas Bill extends this simplification philosophy to the criminal justice interface, removing what Industry Minister Rajput called the “web of outdated rules and regulations” that creates trust deficits.

Economic and Social Implications

1. Judicial System Relief

One of the most significant benefits lies in reducing the burden on Gujarat’s judicial system. Courts are currently overwhelmed with cases involving minor violations that could be handled through administrative processes. By redirecting these cases from criminal courts to administrative tribunals, the legislation allows the judiciary to focus on serious offences while ensuring quicker resolution of minor infractions.

The National Judicial Data Grid indicates that millions of pending cases in lower courts relate to minor infractions that can be addressed through civil or administrative means. Gujarat’s approach provides a model for systematic judicial burden reduction.

2. Empowering Honest Entrepreneurs

The legislation sends a powerful message to law-abiding businesses about the government’s commitment to supporting legitimate enterprises. As highlighted in similar central government reforms, this approach has sent out a clear message to the law-abiding corporations at large, about the government’s commitment to promote ease of doing business in India around trust.

This trust-based approach is expected to encourage formal sector participation, as businesses no longer fear disproportionate criminal penalties for minor technical violations.

Implementation Mechanisms and Governance Framework

1. Administrative Penalty Structure

The bill establishes a sophisticated penalty framework with eight laws now including settlement mechanisms that allow authorities to accept monetary penalties directly. This administrative approach eliminates the need for lengthy court proceedings while maintaining deterrent effects through financial consequences.

The penalty structure is designed to be proportionate to the severity of violations, with graduated increases for repeat offenders. This balanced approach maintains compliance incentives while removing the fear factor that previously hampered business operations.

2. Stakeholder Consultation and Transparency

The Gujarat government emphasized extensive stakeholder consultation throughout the bill’s development. Before passage, the government secured crucial feedback from legal experts, representatives of industrial groups, business houses, officials and other stakeholders. This collaborative approach ensures that reforms address real-world business challenges rather than theoretical concerns.

Gujarat's Competitive Advantage

Leading National Rankings

Gujarat’s Jan Vishwas Bill reinforces its position as India’s premier business destination. The state has consistently ranked among the top performers in Ease of Doing Business assessments, achieving the top rank in the Centre’s BRAP 2020 ranking with 100% compliance with 301 suggested reforms.

Despite having only 6% of India’s geographical area and 5% of the population, Gujarat contributes 8% to the country’s GDP and 18% to industrial output. The state’s manufacturing sector contributes 38% to the state’s GDP, significantly higher than the national average of 18%.

Investment Attraction and Economic Growth

The reforms are expected to further strengthen Gujarat’s position as a preferred global investment destination. The state already accounts for one-fifth of total foreign investment in India in recent periods. The Jan Vishwas Bill removes additional barriers to investment by eliminating regulatory uncertainty and criminal litigation risks for minor violations.

Conclusion: A New Era of Trust-Based Governance

Gujarat’s Jan Vishwas Bill represents far more than legislative reform—it embodies a fundamental transformation in the relationship between government and business. By decriminalizing 516 minor offences and replacing fear-based compliance with trust-based governance, Gujarat has positioned itself at the forefront of India’s economic modernization.

The legislation’s comprehensive scope, from MSMEs relief to judicial burden reduction, demonstrates how thoughtful policy design can simultaneously serve multiple public interests. For entrepreneurs, the bill removes the sword of criminal prosecution that previously hung over minor compliance failures. For the judiciary, it provides essential relief from case backlog pressures. For society, it promotes economic formalization and growth through reduced regulatory friction.

For legal professionals, businesses, and policymakers across India, Gujarat’s Jan Vishwas Bill offers both inspiration and practical guidance for reimagining the role of regulation in a modern economy. The state has proven that it is possible to maintain compliance standards while fostering business growth—a lesson with profound implications for India’s economic future.