As India envisions Viksit Bharat @2047, there is a growing need for justice system reforms that emphasize rehabilitation, social reintegration and sustainability over punitive incarceration. While acknowledging that restorative justice is not applicable to all crimes, this study listed the types of crime which can be approached through a restorative approach instead of a repressive one. This paper highlights how Indian Knowledge Systems offer a crucial and a sustainable solution by integrating restorative justice, ethical governance and community-based rehabilitation with the objectives of Viksit Bharat 2047 and SDG 4(quality education) and SDG 8(decent work and economic growth). Using qualitative research design by relying on secondary data analysis, case studies and literature review of two most important Adhikaranas of Arthashastra, Yagnavalkya Smriti. This study explores how lack of statistics regarding repeated offenders, approaches used to reform the offenders, an inconsistent reintegration process are major reasons which majorly contributed to a partial attempt to restore lost social fabric.