Context:

• India’s entrepreneurial ecosystem has historically been constrained by an overbearing regulatory framework shaped by statist interventions in 1956, 1967 and 1976.
• While the 1991 economic reforms partially restored trust between the state and markets, deregulation remains incomplete.
• The proposed Jan Vishwas Siddhant seeks to shift India from a permission-based regulatory regime to a trust-based governance model, with deep implications for entrepreneurship, job creation, and economic growth.

Core Argument:

• Entrepreneurship is inherently permissionless, protected under Article 19(1)(g) of the Constitution.
• However, India’s regulatory “cholesterol” has created systemic barriers that prevent firms from scaling, leading to a predominance of dwarfs rather than babies in India’s enterprise ecosystem.

Six Pathologies of India’s Regulatory Framework:

• Prior approval raj:
  • Excessive ex-ante approvals (based on forecast rather than actual results) undermine innovation. Entrepreneurs face almost 500 central and over 3,200 state-level approvals.
  • It contradicts the constitutional idea of freedom to practice any profession or business.
• Instrument proliferation:
  • Beyond Acts and Rules, the state uses notifications, circulars, guidelines, SOPs, FAQs, office orders, etc.
  • Over 12,000 estimated non-law, non-rule instruments affecting employers, and creates opacity, uncertainty, and compliance overload.
• Compliance blind spot:
  • Compliance is legally enforceable “shall” obligations, not guidance.
  • Policymakers focus on laws, ignoring cumulative compliance burden. For example, 2025 began with over 69,000 compliances.
  • Though labour codes reduced labour compliances by 75%, replication is pending.
• Enforcing the unenforceable:
  • Unenforceable laws breed corruption, discretion, and implementation gaps. Example, one inspector checking 3.3 lakh weight and measuring instruments.
  • It violates constitutional wisdom distinguishing Fundamental Rights from Directive Principles.
• Process as punishment:
  • Criminal provisions rarely lead to conviction but are used as threats.
  • It results in judicial backlog, regulatory harassment. Example: Cheque bounce criminalisation - constitute 43 lakh cases and 10% of court pendency.
• No single source of truth: Absence of a unified, live database of obligations. Entrepreneurs face unverifiable and outdated compliance demands, encouraging rent-seeking and corruption.

Jan Vishwas Siddhant - Key Features:

• Trust-based deregulation - “Everything is permitted till prohibited”: All licences outside the four areas of national security, public safety, human health and environment will be converted to perpetual self-registration.
• Risk-based and third-party inspections: Random, data-driven inspections to reduce inspector discretion.
• Decriminalisation and proportionality: Apply DPIIT decriminalisation principles across all laws. Replace jail terms with civil penalties where appropriate.
• Regulatory predictability: Mandatory consultations, adequate transition periods, annual fixed date for regulatory changes (e.g., January 1).
• Digitisation and legal clarity: Filings will be digitised, and regulatory instruments with penal provisions will be restricted to laws and rules.
• Single source of truth:
  • IndiaCode will become the live database with all Acts and rules, and after integration with e-gazette, a single source of truth for all obligations.
  • An annual regulatory impact assessment framework by all central ministries will lead to annual reports on compliance and punishment.

Challenges and Way Forward:

• Resistance from entrenched bureaucratic structures: Strengthen civil service performance management.
• Capacity constraints in risk-based regulation: Shift regulatory focus from micro-specification to outcomes.
• Need for coordination between Centre and States: Promote cooperative federalism in regulatory reforms.
• Ensuring accountability without over-regulation: Replicate labour law compliance rationalisation across sectors.

Conclusion:

• The Jan Vishwas Siddhant represents a paradigm shift from ruling to governing, and from praja (subjects) to nagrik (citizens).
• By freeing entrepreneurs from ijaazat and empowering them to focus on koshish, India can unlock non-farm job creation, firm scaling, and global competitiveness.
• Entrepreneurship thrives not on the absence of the state, but on a credible, minimal, and trust-based state—a necessary condition for India’s aspirations of mass prosperity and global power.