Decriminalization vs. Accountability: Impact of The Jan Vishwas Wave on Corporate Fraud

ABSTRACT

India’s regulatory environment has seen a major shift with the introduction of the Jan Vishwas (Amendment of Provisions) Act, 2023, aimed at decriminalizing various minor statutory offences across different sectors. The reform is in sync with the Government’s larger vision of enhancing the ease of doing business by replacing criminal penalties with civil penalties for offences where criminal prosecution was considered too severe. While the move has been lauded widely for easing excessive compliance burdens and boosting entrepreneurship, it has also triggered concerns about its impact on corporate accountability and the deterrence of corporate fraud.

This paper critically assesses whether the current wave of decriminalization finds a proper balance between the facilitation of business operations and the maintenance of effective mechanisms of corporate governance. The doctrinal research methodology is used for the study. The study analyses the legislative reforms introduced through Jan Vishwas Act, relevant provisions of company law, securities regulations, judicial pronouncements, policy reports and scholarly literature. The paper also addresses the difference between defaults in compliance with procedures and intentional fraudulent conduct of corporate bodies. It argues that although decriminalization is justified for technical and administrative failures, serious economic offences should remain subject to strict criminal liability.

The paper concludes that the Jan Vishwas reforms are not to be seen as a dilution of the laws on corporate fraud, but as a recalibration of the regulatory enforcement. However, the success of the reforms depends on strong administrative oversight, effective regulatory institutions, proportionate penalties, technological monitoring mechanisms, and strict prosecution of fraudulent behaviour. The study indicates a regulatory framework that strikes a balance between ease of doing business and robust corporate accountability, ensuring that economic growth is not at the cost of public trust or investor protection.