Judicial reforms for economic growth

Judicial reforms for economic growth

The land of a factory was in dispute. The matter was decided by the High Court after 25 years.

The land of a factory was in dispute. The matter was decided by the High Court after 25 years. The land remained unproductive for all these years leading to lower production and economic growth.

It is necessary to decide such disputes speedily so that productive resources do not remain idle. It is seen that the developed countries have a higher rank in the rule of law of which speedy justice is an integral part.

The 2019 report of World Justice Project places United Kingdom on 12th rank, Singapore on 13th, United States on 20th and India on 68th rank. Pakistan is placed at 117th rank. We can see that the developed countries also have a higher rank on the rule of law.

The expenditures on judiciary have opposite effects on economic growth. Increased expenditures lead to speedy disposal of cases and indirectly help economic growth.

On the other hand, the same increased expenditures impose a burden on the budget of the government and directly lead to a reduction in other expenditures such as on building highways, which lead to a reduction in the growth rate.

However, as shown above, countries spending more on judiciary have higher growth rate. This means that the indirect positive impact of these expenditures is deeper than the direct negative impact.

A study of the World Bank has estimated that judicial delays are leading to a reduction in India's growth rate by 0.5 percent.

The Institute for Economics and Peace has estimated that delays in criminal justice are leading to increased violence and costing India 9 percent of its GDP.

The level of negative impact could be a matter of debates, but it is clear that these have a negative impact on our economic growth.

One reason for judicial delays in India is the number of vacancies in the judiciary. The vacancies were 15 percent in 2006. These increased to 37 percent in 2015 and have remained at about 37 percent in 2019.

The budget expenditure on the judiciary was Rs 4,386 crore in 2018-19. It has been cut to Rs 3,055 crore in 2019-20. There has been no improvement.

No wonder India's rank has declined from 65th in 2018 to 68th in 2019 in the World Justice Project rankings. It may not be a coincidence that our growth rate has declined in tandem.

According to one study, the Supreme Court works for 190 days in a year, the High Courts an average of 232 days and lower courts 244 days in a year. The Supreme Court and the High Courts go on a holiday for nearly two months in the summers. They also enjoy week- or fortnight long holidays during Dusssera and Christmas.

I see no reason for the judges being entitled to such holidays when the people of the countries are not entitled to such luxury and with crores of cases remaining pending before them. I personally argued a case in the Allahabad High Court.

I had to put in four applications for urgent hearings and go to Prayagraj about 20 times before the case could be heard. Often the Judges were absent.

Such delays not only lead to delays in disposal of cases, they also impose a cost on the litigants which is a cost on the economy as well.

I would like to recount my experience in the United States when I was studying. There was a dispute between us three students and our landlord. The landlord took us to court. The decision was given in mere 20 days (in our favour).

Third problem is that there exists an unsaid understanding between the judges and advocates in favour of delay. Most advocates charge fees based on the number of appearances made in the court.

It is profitable for them if the case is heard for numbers of times. They charge fees even if the opposite lawyers seek another date or fall ill. The judges have to work with the advocates.

Thus, the judges do not want to hit at the source of the advocates' incomes either. This has led to the development of a culture of adjournments. I had filed a case against the National Highway No 1 in the National Green Tribunal.

The Tribunal is mandated by the NGT Act to dispose of the cases within six months. However, the Tribunal took more than four years to decide the matter.

There does not exist a forum where one could appeal against the Tribunal not following the law. I considered filing an appeal before the Supreme Court but that too would take a number of years.

Thankfully, the Cause List and judgments of the Supreme Court and High Courts are available online. However, the pleadings on the basis of which the judgments were given are not available.

For example, I came to know from news reports that certain hydropower companies had filed a case in some court challenging the government's order asking them to release certain amount of water to keep the river alive. I thought that the case may be filed in Uttarakhand High Court.

I was able to locate the probable case after spending a few hours. The case is pending hence I could not access any judgment. I could not also get copy of the case so that I could apply to become a party. The courts could be easily accessible as the litigants have to also file an e-copy of their submissions which could be made available online.

This would also make it possible for public activists to look at what was argued, what was accepted and what was ignored by the judges. Such changes can improve the delivery of justice without entailing increased expenditures. The average time taken for the disposal of a case in Singapore in 1990 was six years.

Then judicial reforms were implemented. By 1999, the average time for the disposal of a case reduced dramatically to mere 1.25 years.

This happened despite Singapore having only 0.6 percent of judges per lakh population against us having 2.0 percent judges for the same number of population. There is a need for the Supreme Court to study the experience of Singapore.

Justice must be delivered speedily. That will create a fear of law in the minds of people and discourage them to violate the law. Strongmen illegally occupy the land and building of the weak because they know that the cost of justice will be very high because of the delays.

In this way the entire society is encouraged to do wrong. The government needs to increase expenditures on the judiciary and fill the vacancies.

The Supreme Court should set an example by increasing the workdays. The government should enact a law to enable a litigant to make a judge accountable for the delays. The pleadings should be made available online.

(The writer is formerly Professor of Economics at IIM, Bengaluru)

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