It is understood that rising income has a positive impact on rising crime. Therefore, neglect of the judiciary and the justice system as a whole can lead to erosion in governance and rule of law itself.
“Given the potential economic and social multipliers of a well-functioning legal system, this may well be the best investment India can make”
Economic Survey 2018-19
The government’s latest budget promise of making India a $5 trillion economy has been lauded for being ambitious and bold, and is ‘imminently possible’ according to the finance minister Nirmala Sitharaman.
However, barriers to India’s growth are not just economic. Beyond share markets, policy regimes and industrial policies there are crucial and fundamental structural deficiencies that obstruct development. The Economic Survey captures this by stating that “arguably the single biggest constraint to ease of doing business in India is now the ability to enforce contracts and resolve disputes. This is not surprising given the 3.5 crore cases pending in the judicial system”. Though India has considerably improved and is now ranked 77 out of 190 countries in the World Bank’s Ease of Doing Business index, it still takes, on average, 1,445 days to enforce a contract.
Clearly, the justice system and the rule of law are critical to the prosperity of a country. The Economic Survey too acknowledges this relationship when it says, “the relationship between economic governance and the Rule of Law (Dandaniti) has been emphasised by Indian thinkers since ancient times...It should be no surprise, therefore, that the Preamble to the Constitution of India defines that the first role of the State is ‘to secure for all its citizens: Justice, social, economic, and political’.
With repeated exhortations calling for increasing allocation, filling vacancies and improving infrastructure by various stakeholders, led by the Supreme Court, the expectation from the Budget was that it would make increased investments towards repairing the police and judiciary, which are beset with outdated legal frameworks, inadequate resources, poor oversight and management, and serious issues of quality.
India’s subordinate and district judiciary, which receives the bulk of litigation, is functioning with a deficit of 20 per cent judges against its sanctioned strength of 22,750. Our police force, ridden with political interference, is understaffed by 30 per cent; for every 100,000 people there are only 144 police officers. From the infrastructural point of view, if the sanctioned strength of judges in each state were met: only four states and three union territories would have sufficient courtrooms. Similarly, police infrastructure and equipment remains obsolete, with inadequate communications, transport and forensic capabilities.
Budgets for the judiciary come both from the Centre and the states. Although, between 2016-17 and 2018-19 the total spend on judiciary (Union and states) has grown by 53 per cent the base amount is so low that seen at the national level, India still spends just 0.4% of total public expenditure on the judiciary. On the police, a state subject, spending has been reducing. According to PRS Legislative Research, between 2011 and 2018 the average budgeted expenditure across states decreased to 4.4 per cent from 4 per cent.
The consequences of an understaffed, overburdened and under-resourced police and judiciary are deteriorating rule of law and a falling capacity to resolve cases. This structural incapacity in the justice system has led to growing violence, which according to the Institute of Economics and Peace, has cost India an equivalent of 9 per cent of the GDP.
It is understood that rising income has a positive impact on rising crime. Therefore, neglect of the judiciary and the justice system as a whole can lead to erosion in governance and rule of law itself. In a growing economy such as India, government investment in judiciary should be commensurate to its overall GDP growth as rapid development places greater demands on the justice system.
Though the Budget lost the opportunity to prioritise the higher judiciary sector there is a glimmer of hope in the Economic Survey — one that the government must work to realise. This is because although the link between economy and a weak justice may not appear to be a direct one, it is of fundamental and undeniable importance. The government must provide justice and the rule of law the topmost priority in budgeting if it is serious about making India a $5 trillion economy.Valay Singh is a freelance journalist. Views expressed personal.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.