The Judiciary in the Indian Political Economy

The Political Economy Seminar is a monthly seminar series that provides a forum for academics, public policy researchers, and practitioners to discuss a new piece of original research and provide their inights on issues related to India's political economy. 

An effective judicial system is imperative for a political economy that ensures broad-based and inclusive economic development. It is the mechanism through which constitutional restraints and legal contracts are enforced. However, there are growing concerns that the judiciary has, on the one hand, overreached into the domains of the legislature or the executive and, on the other hand, become a tool in the hands of those with economic or political power. Thereby, the judiciary has also become a site of ideological battles that shape the nature of our economic development.

Carnegie India hosted Gopal Jain, Dhiraj Nayyar, Shamika Ravi, and Paranjoy Guha Thakurta to discuss the role of the judiciary in India’s political economy. This panel discussion was moderated by Suyash Rai.

DISCUSSION HIGHLIGHTS

• The Indian Judiciary: Participants made four main observations about the judicial system. First, they stated, while the High Court and the Supreme Court of India have opened their gates to public interest litigation to seek justice, access to justice and contract enforcement remains very difficult and expensive. Second, participants argued that while the courts have, over time, asserted much more independence than envisaged in the Constitution, judicial accountability has remained elusive, thereby making it difficult to hold the courts accountable for their mistakes. Third, some participants felt that even as the courts have tried to solve problems of policy and implementation—from air pollution to the performance of government schemes—the principles justifying their solutions to these problems have become less clear and coherent, making the decisions less predictable. Finally, participants agreed, even as the judiciary has taken on more problems to solve in an increasingly complex economy, it seems that the judiciary has not undertaken the requisite reforms to improve its efficiency and competence to meet the growing demands of the political economy.
• Judicial Efficiency: Participants discussed the state of the judiciary in the Indian political economy and deliberated over various structural reforms that could further improve the judicial system. Noting the increasing number of pending cases in higher courts, they expressed concerns over limited judicial capacity. Some participants suggested measuring the productivity of courts and making the information public, while other participants highlighted regional variations in the time taken for judgements. Participations also highlighted the challenges in measuring productivity of the judicial functions. They suggested that the judicial bench strength is essential for the judiciary to function optimally and agreed that certainty and costs of judgments were two key factors that courts should consider. Finally, given that courts in India are repositories of enormous power, participants emphasized the importance of the enforceability of contracts. 
• Applying Market Principles in the Judiciary: Noting the impact of India’s economic liberalization on the judiciary’s approach toward economic matters, some participants agreed that the judiciary’s approach reflects the larger political economy. Participants agreed that the judiciary has as important a role as the legislature and the executive in shaping India’s economic aspirations. Some participants noted that the matrix of judicial decision making should be comprehensive and keep in pace with the evolving nature of technology. Participants advised that the three market principles—competition, innovation, and accountability—should be adopted within the judicial system to increase its efficiency. Other participants challenged the wisdom of bringing market principles into the judiciary, pointing out how this might dilute the judiciary’s commitment to the rule of law. They noted that the economic consequences should not deter the judiciary from pass judgments that are in violation of the law.
• Quality and Proportionality: Some participants discussed the highly disputed cases in the Supreme Court, such as the decision to quash telecom licenses and the decision to ban mining in certain states, among others. It was suggested that the judiciary should issue penalties proportional to the violation and only those who violate the laws should be penalized. Participants agreed that the Indian judicial system should evolve with the changing socio-political environment. One such way of reform is to have specialized benches for different fields, participants noted. 
• Future of the Indian Judiciary: Participants deliberated over the extent to which the judiciary should play an active role in the Indian political economy. Participants stressed the judiciary’s role in supporting an individual’s right to property and swift justice. They agreed that the judiciary should consider appointing more field experts for certain judgements. However, participants disagreed on whether the role of the courts is to resolve problems or solve problems. 

This event summary was prepared by Megha Gupta, a research intern at Carnegie India.

Speakers

Gopal Jain

Gopal Jain is a senior advocate at the Supreme Court of India and the Arbitration Council.

Dhiraj Nayyar

Dhiraj Nayyar is the chief economist at Vedanta and the author of Modi and Markets: Arguments for Transformation. Prior to this, he also served as the officer on special duty and head of the economics, finance and commerce vertical at the NITI Aayog. He has also been managing editor of the Quint and is a columnist for the Bloomberg View. 

Shamika Ravi

Shamika Ravi is the director of research at Brookings India and a senior fellow of Governance Studies Program at Brookings India and Brookings Institution Washington D.C. She leads the development economics research vertical at Brookings India, where the focus is on financial inclusion, health, gender inequality and urbanisation. Ravi is also a visiting professor of economics at the Indian School of Business and was a member of the Economic Advisory Council to the Prime Minister of India.

Paranjoy Guha Thakurta

Paranjoy Guha Thakurta is a writer, speaker, anchor, interviewer, teacher, and commentator. His areas of interest are the working of the political economy and the media in India and the world. His work spans over 40 years and cuts across different media – print, radio, television and documentary cinema.

Moderator

Suyash Rai

Suyash Rai is a fellow at Carnegie India. His research focuses on the political economy of economic reforms and the performance of public institutions in India.