Laws and order

Decriminalisation will improve business environment

The introduction of an omnibus Bill to decriminalise minor offences, amending 183 provisions across 42 Act administered by 19 ministries, is being positioned as a means of improving the ease of doing business climate and unclogging the judicial system. It represents a continuum of the Narendra Modi government’s focus since 2014, with the Companies Act 2013 undergoing a thorough review to identify minor offences that attracted criminal liabilities. The exercise either changed the nature of the offence to a civil wrong or certain offences were omitted from the statute book altogether. Overall, the number of penal provisions was reduced from 134 to 124, and the benefits were visible soon after, with over 1,000 default cases decided without resort to the courts.

In the recent tranche of decriminalisation proposals known as the Jan Vishwas Bill, the government seeks to remove or change to civil wrongs a plethora of laws. For instance, the Bill proposes to remove a two-year imprisonment term under the India Post Office Act of 1898 for sending unpaid postal articles. Significantly, the new Bill, which has been referred to a parliamentary committee, proposes to omit Section 66A of the IT Act. This controversial section made it a punishable offence for any person to send offensive information using a computer or electronic device and to send information they believed to be false. This provision, which vested vast discretionary powers with enforcement agencies, was declared unconstitutional by the Supreme Court and struck down in 2015. But various state jurisdictions continued to make arrests under this section and the apex court ordered states and their police forces to stop prosecuting free speech on social media by arresting people under this section. The explicit removal of this section from the statute books is, therefore, urgently needed.

Though the general principle of decriminalising minor offences is unexceptionable, the eagerness to improve the doing-business ecosystem also needs to be balanced by the imperatives of public interest. Proposed amendments to decriminalise several activities under the Environment Act offer one example. These include discharging pollutants in excess of specified standards, handling hazardous substances without adequate safeguards and not allowing the central government to investigate an offence. All of these attract imprisonment of up to five years, a fine of Rs 100,000, or both, with continuous violations resulting in a fine of Rs 5,000 per day. The draft amendment Bill does away with the imprisonment but retains a fine ranging from Rs 500,000 to Rs 5 crore with commensurate daily fines for continuous compliance violations. It is only the failure to pay a penalty that will attract a fine of Rs 10 crore, or a three-year imprisonment term or both. Given Indian industry’s poor compliance with environmental laws, decriminalisation and a relatively modest penalty regime is likely to worsen the steady degradation of India’s natural resources.

This apart, there is an urgent need for both the Centre and states to ensure that their respective enforcement agencies are properly apprised of the amendments and briefed on the importance of following the spirit of the laws too. The large number of notices sent to assessees for Goods and Service Tax recently is a case in point. These issues influence the business environment as much as petty and dated laws.