{"id":210813,"date":"2022-10-17T20:12:04","date_gmt":"2022-10-17T14:42:04","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=210813"},"modified":"2022-10-17T20:55:36","modified_gmt":"2022-10-17T15:25:36","slug":"reducing-the-legal-burden","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/reducing-the-legal-burden\/","title":{"rendered":"Reducing the legal burden"},"content":{"rendered":"\n

Source<\/strong>: The post is based on an article\u00a0\u201cReducing the legal burden<\/strong>\u201d\u00a0published in\u00a0Business Standard <\/strong>on\u00a017th<\/sup> October 2022<\/strong>.<\/p>\n

Syllabus: GS 2 \u2013 Governance <\/strong><\/p>\n

News<\/strong>: The government is planning to come up with a bill that will be aimed at increasing the ease of doing business in India.\u00a0 The bill is being drafted by the Ministry of Commerce and Industry in consultation with the states.<\/p>\n

The bill will focus on reducing the punitive measures from imprisonment to fines for a range of minor offences.<\/p>\n

What are the earlier changes made in punitive measures by the government?<\/strong><\/h5>\n

There have been significant changes made in the Companies Act by the government since last year.<\/p>\n

For example<\/strong>, provisions related to foreign companies and non-compliance by auditors to report fraud have reduced from a prison sentence to monetary fines.<\/p>\n

In Corporate Social Responsibility (CSR), failure to spend the required amounts attracted a maximum sentence of three years in prison earlier but this has been replaced by a high fine.<\/p>\n

Government has also created an \u201cin-house adjudication\u201d framework with adjudicating officers with the change in some provisions from criminal to civil.<\/p>\n

What are the advantages of<\/strong>\u00a0<\/strong>easing the punitive burden on companies?<\/strong><\/h5>\n

First,<\/strong> it can create a positive impact on the business environment, especially foreign direct investors, as it reduces the compliance burden.<\/p>\n

Second,<\/strong> as per the Ministry of Corporate Affairs, these measures will help to focus on major issues rather than focusing on every minor issue.<\/p>\n

Third,<\/strong>\u00a0it will also reduce the burden on the National Company Law Tribunal as it will no longer have to give judgements on minor offenses.<\/p>\n

What are the concerns associated with the reduction in punitive burden?<\/strong><\/h5>\n

First,<\/strong>\u00a0the risk of corruption and political influence remain high as these measures do not reduce the encounter between corporations and the state. It is because adjudicating officers are government employees.<\/p>\n

Second,<\/strong> companies may view penalties as an acceptable cost of doing business rather than a punishment of non-compliance.<\/p>\n

Third,<\/strong> the decriminalization of provisions may be wrongly used if it is indiscriminately applied to the laws governing corporate activities.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on an article\u00a0\u201cReducing the legal burden\u201d\u00a0published in\u00a0Business Standard on\u00a017th October 2022. Syllabus: GS 2 \u2013 Governance News: The government is planning to come up with a bill that will be aimed at increasing the ease of doing business in India.\u00a0 The bill is being drafted by the Ministry of Commerce… Continue reading Reducing the legal burden<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10498],"class_list":["post-210813","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704863783},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/210813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=210813"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/210813\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=210813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=210813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=210813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}