By Ajay Bahl

India stands at a defining moment in its economic journey. As the nation progresses rapidly in its aspirational journey towards a ‘Viksit Bharat’ (a developed India) whose benefits reach every citizen, including those at the margins, an environment that continues to unleash the entrepreneurial spirit and investment is fundamental. That will enable the private sector to play a pivotal role in achieving the goals in constructive collaboration with the Government.

The Twin Objectives

Two interlinked objectives are critical to addressing this challenge. The first is fostering a trust-based relationship between business and Government, at both the Central and State levels, as well as with regulators and investigating authorities. The second is judicial reform that ensures that the ecosystem delivers efficient and accessible justice to all, while also ensuring speedy punishment of those who betray that trust, whether through financial sanctions or incarceration, depending on the nature of the offence.

While some initiatives are underway, including the attempt at prelitigation mediation, much more attention and consideration is needed to address these twin imperatives. This has to be a priority for all relevant stakeholders.

The Scale of the Crisis

The numbers speak for themselves. As per data from the National Judicial Data Grid, pending criminal cases alone stand at approximately 3.97 crore, of which around 3.78 crore are before the District Courts, 19.2 lakh before the High Courts, and 20,689 before the Supreme Court. In early 2020, when CII first made recommendations on decriminalisation, this figure was around 2.5 crore, meaning that nearly 25 lakh cases have been added every year since.

Millions of civil cases are also pending before courts, and in most courts across the country, the annual institution of fresh civil cases exceeds disposals, leaving very little judicial time to attend to pending matters. This pendency does not include disputes before various Tribunals dealing with matters under key statutes including tax, company law, insolvency, exchange control, prevention of money laundering. Delay in disposal of matters is thus inevitable.

Clearly, the constant pipeline of fresh cases entering the judicial ecosystem, both civil and criminal, must be reduced. Beyond decriminalisation and its benefits (discussed below), a broader framework of regulatory forbearance should be considered: one that permits settlement without admission of guilt across various laws. This is something SEBI has instituted and operated quite efficiently. Such measures will also help keep matters from being litigated and curb the pipeline.

Decriminalisation as a Reform Lever

While calibrated decriminalisation (excluding serious offences) cannot by itself address the full magnitude of the problem, it is a significant and progressive initiative within this broader reform landscape and one that aligns with both objectives referred to above. First, it promotes an environment of trust by signalling the Government’s intent to eliminate the fear of possible misuse of prosecution and arrest powers by investigative agencies. Second, when implemented appropriately, it can help de-clog the courts by reducing both the pipeline and backlog. For instance, by offering the revised financial sanctions for pending cases that have been decriminalised, as was done under the Companies Act.

Does it work? There is intrinsic evidence that it does.

Consider the Income Tax Department: even when working within limitations imposed by statute, and without resorting to arrests or frequent prosecutions, tax collections have continued to grow, relying on the power of attachment to recover dues and penalties. Likewise, there is no evidence to suggest that violations under the Companies Act have increased merely because many offences have been decriminalised.

The Jan Vishwas Act: A Landmark Step and the Path Ahead

Against this backdrop, the Jan Vishwas (Amendment of Provisions) Act, 2026 represents another significant step towards creating a trust-based regulatory environment. The Act rationalises over a thousand offences, replacing imprisonment with monetary penalties or warnings, introducing graded enforcement with leniency for first-time offenders, and aligning penalties with the severity of violations. It reflects a shift from punitive regulation to one that is facilitative and proportionate, thereby supporting both ease of doing business and ease of living.

The Act also contemplates the creation of Adjudicating Officers and Appellate Authorities within the respective statutes. Importantly, it moves from the concept of a ‘fine’, which normally must be levied by a court following a trial, thereby adding to pendency and delay, to a ‘penalty’, which can be determined by an in-statute mechanism. This has been a long-standing industry recommendation.

Looking ahead, as decriminalisation progresses further, including at the State level, as it must, consideration should be given to removing any bar against the retrospective application of decriminalised provisions, whether under the Jan Vishwas framework or other laws. Precedents in other statutes and settled judicial pronouncements already address how and when new less onerous laws can apply to past offences. This alone could greatly assist with de-clogging the courts. Additionally, introducing limitation periods for filing criminal complaints, starting from the time of identification of the offence, would improve the efficiency of investigations (since witnesses and evidence are more likely to be available) while also reducing the pipeline of cases where complainants have not acted in a timely manner.

Other Trust-Building Measures

To further the trust-building objective, even where offences are not decriminalised, some tests of proportionality must be applied. As an example  for frequently invoked offences such as cheating involving parting with property, which is invariably the allegation, de minimis thresholds before arrest is permitted (as in the GST law) or for it to constitute a predicate offence under the Prevention of Money Laundering Act would be welcomed, as would a measured approach before registering FIRs. Investigations should focus on the party under investigation and those against whom there is sufficient evidence of abetment. Roving enquiries against persons who are not the subject of the investigation, but from whom information is being sought to assist the enquiry, should be avoided.

The twin objectives of judicial reform and building trust, of which decriminalisation is a vital subset, are central to building a modern, efficient, business-friendly regulatory environment, one that is crucial for the aspirational nation that India is. Industry and other stakeholders must also play their part to earn this trust. Continued dialogue between Government, regulators, investigative agencies, and industry will be essential to institutionalise these reforms and sustain India’s growth momentum. CII has been and will remain committed to championing these crucial measures and their realisation. The path forward is clear; what is needed now is the collective will to walk it.

 Ajay Bahl, Co-Founding & Managing Partner, AZB & Partners; Chair of the CII Task Force on Judicial Reforms