Union Budget 2023: For ease of doing business, 39,000 compliances reduced

Eligible and specified professions whose turnover is between from Rs 50 lakh to Rs 75 lakh will benefit from Budget 2023's announcement of Presumptive Tax Scheme

Finance Minister Nirmala Sitharaman, in the Union Budget 2023 presented on February 1, said that to enhance the ease-of-doing business, more than 39,000 compliances have been reduced and more than 3,400 legal provisions, which had criminal implications, decriminalised.

Sitharaman's announcements are in line with the Jan Vishwas Bill, which was introduced in Lok Sabha in December 2022. The Bill is now before the joint parliamentary committee.

The rationale of Jan Vishwas Bill

It amends 42 Acts to reduce compliances for businesses and ensures that there is ease of doing business. Acts such as the Indian Post Office Act, 1898, the Environment (Protection) Act, 1986, the Public Liability Insurance Act, 1991, and the Information Technology Act, 2000, were amended.

Many offences, some leading to imprisonment, have been decriminalised and replaced with just a monetary penalty. For instance, under the Agricultural Produce (Grading and Marking) Act, 1937, counterfeiting grade designation marks is punishable with an imprisonment of up to three years and a fine of up to Rs 5,000. The Bill intends to replace this with a penalty of Rs 8 lakh.

According to the Economic Survey 2022-23, decriminalisation of minor economic offences under the Companies Act of 2013 has led to 400,000 companies willingly rectifying their past defaults to avoid penalties. Furthermore, after the reform, more than 1,400 default cases have been decided without going to a court of law.

PAN to become the common identifier

The Permanent Account Number (PAN) will be the common identifier for all digital systems identified by the government.

A PAN card is a 10-character identification issued by the Income-Tax Department to any person who applies for it or to whom the department allots the number without an application.

At present, there are over 13 different business IDs like EPFO, ESIC, GSTN, TIN, TAN and PAN, which are being used to apply for various government approvals.

Sitharaman's announcement will now ensure that PAN is used as a common identifier for moving towards a single national window system to seek different clearances and approvals of the central and state departments.