The various Production-Linked Incentive (PLI) schemes active in India have resulted in actual investment of over ₹1.88 lakh crore as of June 2025, the ministry said. File
| Photo Credit: Reuters

The various Production-Linked Incentive (PLI) schemes active in India have resulted in actual investment of over ₹1.88 lakh crore as of June 2025, the ministry said. File
| Photo Credit: Reuters

Government would introduce the Jan Vishwas Bill 2.0 to decriminalise over 100 outdated legal provisions to achieve greater ease of doing business in the country. Photo used for representation purpose only.
| Photo Credit: Getty Images/iStockphoto

Finance Minister Nirmala Sitharaman announced in the Union Budget 2025-26 speech that the government would introduce the Jan Vishwas Bill 2.0 to decriminalise over 100 outdated legal provisions to achieve greater ease of doing business in the country.

The existing Jan Vishwas (Amendment of Provisions) Act, 2023 has decriminalised 183 Central Acts administered across a spectrum of 19 Ministries or Departments.

The key objective of the Jan Vishwas Act 2023 was to remove archaic provisions that did not serve the evolving technological and business environment.

The Jan Vishwas 2.0 intends to further usher in comprehensive reforms aimed to unburden the judiciary and reduce litigation time and costs. It would introduce civil penalties and administrative actions for minor technical and procedural lapses.

The Minister’s announcement on Saturday (February 1, 2025) follows a Ministry of Commerce and Industry statement in September 2024 that the Department for Promotion of Industry and Internal Trade was “working on about 100 rules and laws of various departments of government to bring Jan Vishwas 2.0 Bill”. The September 2024 statement had termed Jan Vishwas 2.0 a “major step towards aligning India’s regulatory framework with global business standards, promoting investor confidence, and facilitating smoother business operations”.

The 2023 Act had brought in measures such as pragmatic revision of fines and penalties commensurate to the offence committed; establishment of adjudicating officers and appellate authorities; and the periodic increase in quantum of fine and penalties.

Section 3 of the 2023 Act provided that the fines and penalties of the 42 Central Acts would be increased by 10% every three years.

The 2023 Act covers amendments in statutes across a span of over 100 years. These include the Press and Registration of Books Act of 1867, the Indian Post Office Act of 1898, the Boilers Act of 1923, the Indian Forest Act 1927 to the more recent laws like the Prevention of Money Laundering Act, 2002 and the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) of 2016.

In August 2023, a few days before the Jan Vishwas Act, 2023 received the President’s assent, the government had explained that this law was an endeavour to establish a balance between the severity of the offence and the gravity of the prescribed punishment. It was a step to ensure that businesses and citizens adhere to the law without the law losing its rigour.

Congress leader Jairam Ramesh. File
| Photo Credit: ANI

The Congress claimed Sunday (January 19, 2025) the Modi government’s “retrograde policies” have broken the confidence of investors in India and converted “ease of doing business to unease in doing business”.

The upcoming budget must eliminate “raid raj and tax terrorism” to fix this, the Opposition party said.

It also called on the government to take action to protect Indian manufacturing jobs and take decisive action to shore up wages and purchasing power.

Congress General Secretary (In-charge, Communications) Jairam Ramesh said the Modi government has long proclaimed its desire to improve the “ease of doing business” in India but yet in the past decade “we have only seen an easing of private investment which has fallen to record lows and the easing out of businesspersons who have departed India in large numbers for foreign shores”.

“A byzantine, punitive, and arbitrary tax regime covering both GST and income tax – which amounts to sheer Tax Terrorism – is now the greatest threat to India’s prosperity and has contributed to an ‘unease of doing business’,” he said in a statement.

The biggest component of investment which is private domestic investment has been weak since 2014, Ramesh said, adding it was solidly in the 25-30 per cent of GDP range during Manmohan Singh’s tenure as PM.

“In the last ten years, it has collapsed to the 20-25 per cent of GDP range. This sluggish investment has been accompanied by a mass exodus of high-net-worth individuals. More than 17.5 lakh Indians have acquired the citizenship of another country over the past decade,” he said.

An estimated 21,300 dollar-millionaires left India between 2022 and 2025, he claimed.

“All this is happening for three reasons. Firstly, a complicated GST. According to former Chief Economic Advisor Arvind Subramanian, the GST which was proclaimed by the PM to be a Good and Simple Tax has up to a 100 different tax rates, including cesses,” he said.

The multiplicity of rates and confusion has facilitated alarming GST evasion of Rs 2.01 lakh crore, almost double the Rs 1.01 lakh crore reported in FY23, he said.

Mr. Ramesh claimed that 18,000 fraudulent entities have been uncovered with many more likely undetected.

“Secondly, despite claims to the contrary, Chinese imports into India continue unabated with a record trade deficit of $85 billion in 2023-24. This has damaged Indian manufacturing, especially in labour intensive sectors,” Ramesh said.

Thirdly, weak consumption and stagnant wages have reduced India’s consumption growth despite the free availability of personal debt, he said.

“According to Ministry of Agriculture data, real wages for agricultural labour grew 6.8 per cent per year under the UPA, and declined 1.3 per cent per year under the Modi government,” he said.

Citing the Periodic Labour Force Survey data, he said it shows that average real earnings stagnated between 2017 and 2022 across all workers — salaried, casual and self-employed.

“These retrograde policies have broken the confidence of investors in India. To fix this, the budget must eliminate raid raj and Tax Terrorism, take action to protect Indian manufacturing jobs and take decisive action to shore up wages and purchasing power, which in turn will incentivise Indian business to invest. Nothing less will do,” Ramesh asserted.

Sharing his statement on X, Mr. Ramesh said, “The 2025/26 Union Budget will be presented thirteen days from today. Here is our statement on how the Modi Government has converted the ease of doing business to unease in doing business – thereby depressing private investment sentiment. Radical action is necessary to fix the damage.”

The Congress has been attacking the government over its handling of the economy, claiming the issues of rising prices, decreasing private investment and stagnating wages are hitting the common people hard.

Gold jewellery at a shop in Kolkata.
| Photo Credit: AFP

While providing primacy to growth with inclusion, the Budget attempts to infuse a new momentum to the economy and strengthen India’s resilient ecosystem so that the country emerges as a growth engine of the world.

An overarching theme

An important focus of the Budget is simplification and rationalisation of the tax structure. The document has spelled out the contours to achieve this, while trying to minimise disputes and expand the tax net. ‘Ease of doing business’ is an overarching theme behind the Budget tax proposals.

In the interest of moving towards a common understanding on the OECD BEPS (Base Erosion and Profit Shifting) Action Plan, the government has withdrawn the equalisation levy of 2% on e-commerce transactions. This demonstrates the government’s participation in the initiative to create an international framework to combat tax avoidance. The proposals to expand the scope of safe harbour rules, streamline transfer pricing assessment procedure, and reduce the corporate tax rate on foreign companies from 40% to 35%, as suggested by CII, are expected to promote ease of international taxation, improve investor sentiment, and further attract foreign investments in the economy.

The angel tax has outlived its utility and has rightly been abolished. This move will ensure the orderly growth of the Indian startup ecosystem, resolve the problem of dip in funding, and give confidence to investors and entrepreneurs to invest and build from India, as suggested by CII to the government before the Budget.

CII has been advocating the rationalisation and simplification of the Withholding Tax regime under the Income Tax Act. Decriminalisation of some TDS (tax deducted at source) offences; the SOPs (standard operating procedures) and compounding guidelines for TDS defaults; and rejig in the existing TDS rates under certain categories are welcome moves in this direction, thereby enhancing ease of doing business.

The changes in the capital gains tax regime have been brought in the interest of rationalisation. So far as the removal of indexation benefit in the calculation of long-term capital gains tax is concerned, industry would look forward to seeing this move help the agenda of tax certainty and simplification.

Raising the standard deduction and increasing the tax slabs under the new regime, while increasing the deduction for family pension and the new pension scheme are positive steps towards providing tax relief to middle-class individuals, thereby pushing consumption and demand in the economy.

As a push towards the government’s agenda for simplification and rationalisation, the new scheme of block assessment for search cases and reducing the time limit for which reassessment can be done are pertinent. The proposal to introduce the ‘Vivad se Vishwas Scheme, 2024’ for settlement of pending appeals would go a long way in reducing litigation and releasing amounts stuck under tax disputes. Digitisation of major taxpayer services is a welcome move, in light of the increased need for digitisation and ease of doing business.

Customs duty rates

On the customs front, the government continues to focus on promoting domestic manufacturing and helping India get onto the global value chain, thereby boosting exports. Continuation of rationalisation of customs duty rates and simplification of compliance would enhance ease of doing business, removal of duty inversion, and reduction of disputes.

CII applauds the government for accepting industry’s call for waiver of interest and penalty on late payment of GST (Goods and Services Tax) and exclusion of cash balance lying in the cash register of the taxpayers for calculation of interest.

The Budget ticks all the boxes for boosting competitiveness, growth, and promoting tax reforms. Overall, the Budget has delivered beyond expectations, while keeping an eye on much-warranted realism.

Chandrajit Banerjee, Director General, CII

US-India Strategic Partnership Forum has urged Union Finance Minister Nirmala Sitharaman to ensure a stable and predictable tax environment as she prepares for her annual budget later this month.
| Photo Credit: PTI

The US-India Strategic Partnership Forum has urged Union Finance Minister Nirmala Sitharaman to ensure a stable and predictable tax environment as she prepares for her annual budget later this month.

The US-India Tax Forum, a dedicated Tax Policy Forum of the US-India Strategic Partnership Forum (USISPF), said this in a set of recommendations to Ms. Sitharaman.

In a press release by USISPF, the tax forum said that a stable and predictable tax environment is imperative to boost investment sentiment across sectors.

“The industry eagerly anticipates the Union Budget 2024-25, the first budget of the re-elected Government, which is expected to introduce measures that will stimulate growth across sectors,” it said.

Asserting that an investment-led growth strategy is essential to support India’s economy, it said measures are needed to enhance the ease of doing business, rationalise the cost of doing business, and simplify tax rates and tariffs.

The business community looks forward to tax efficiency measures and clarifications that will address transactional issues around the tax legislation, unlocking growth and investment opportunities, USISPF said.

Observing that rationalisation of corporate tax rates has long been an ask for companies across sectors, the US-India Tax Forum suggested bringing parity in tax payable by domestic and foreign players in multiple sectors.

“This would ensure a level playing field in sectors such as banking where foreign banks’ branches pay high taxes in India. Acknowledging the global developments around the minimum tax deal, the Tax Forum has highlighted the need to rationalise corporate tax rates,” the press release said.

The forum also suggested significant reforms in the capital gains tax structure, which it said is “currently complex”.

It underscored the need to bring parity among tax rates and holding periods for investments across equity, debt, and immovable property, calling its present form “fragmented”.

“This would lead to a simpler capital gains tax structure and reduce the compliance burden,” it said.

“The ensuing budget of the government is expected to build on the reforms previously implemented,” said Tarun Bajaj, chairperson of the US-India Tax Forum and former Revenue Secretary.

Bajaj said it is expected to introduce targeted reforms in direct taxes and customs policies to enhance India’s economic partnerships globally.

“The industry should anticipate measures to streamline corporate tax structures and transactions, incentivise investments, and simplify customs procedures to facilitate smoother trade flows,” he said.

“These initiatives are crucial for fostering a conducive business environment and strengthening bilateral economic ties, ensuring mutual prosperity and competitiveness in the global market. Additionally, they will further build on the ease of doing business for industries in India,” Bajaj said.

USISPF president and CEO Mukesh Aghi said multinational corporations anticipate Budget 2024-25 to prioritise stable tax policies, robust infrastructure investments, innovative incentives, and sustainable development initiatives, fostering a conducive business environment for growth and global competitiveness.

“Our recommendations are largely aligned towards these areas, seeking clarity and consistency in regulations,” he said.

Naveen Aggarwal, Partner-Tax, KPMG India, said India Inc’s expectations are bigger and bolder in the run-up to this budget as it awaits substantive proposals around long-standing requests — faster resolution of tax disputes, extension of lower tax regime to incentivise new manufacturing, rationalisation of capital gain and withholding tax regimes, amongst the prominent ones.  “With more than 40 countries across the globe already working towards implementation of Pillar 2 GloBE rules, the need of the hour is for India to develop a comprehensive roadmap for implementing these global tax reforms. This would help ensure that India is on course to get its fair share of taxes. Clarity is also awaited on the future of India’s equalisation levy, the fate of which is intertwined with Pillar 1 Amount A MLC ratification,” Aggarwal said.

Photo used for representation purpose only.
| Photo Credit: Reuters

The RBI on July 2 proposed rationalising regulations that cover export and import transactions with an aim to promote ease of doing business and empower banks to provide more efficient service to their foreign exchange customers.

The central bank has issued ‘Regulation of Foreign Trade under Foreign Exchange Management Act (FEMA), 1999 – Draft Regulations and Directions’ in this regard.

As per the draft, every exporter should furnish to the specified authority a declaration specifying the amount representing the full export value of the goods or services.

“The amount representing the full export value of goods and services shall be realised and repatriated to India within nine months from the date of shipment for goods and date of invoice for services,” it said.

The draft also proposes that an exporter who has not realised the full value of export within the time specified may be caution listed by the authorised dealer.

An exporter who has been caution listed can undertake export only against receipt of advance payment in full or against an irrecoverable letter of credit, to the satisfaction of the authorised dealer.

According to the draft, no advance remittance for the import of gold and silver should be permitted unless specifically approved by the Reserve Bank of India.

The RBI said the proposed regulations are intended to promote ease of doing business, especially for small exporters and importers.

They are also intended to empower Authorised Dealer banks to provide quicker and more efficient service to their foreign exchange customers, the central bank said.

The RBI has sought comments on the draft regulations under FEMA and directions to authorised dealer banks by September 1.