Economic Survey 2018-19: Investment in legal system can stabilise economic growth

The contract enforcement is the single biggest constraint for improvement of 'Ease of Doing Business' (EoDB) ranking of the country and hurdle in economic growth, says the Economic Survey 2018-19 report, which Union Finance Minister Nirmala Sitharaman on Thursday tabled in Parliament.

"Economic growth and social well being can be stabilised by making the investment in the legal system," states the Survey, saying that investment in the legal system may be the best investment India could make.

"Delays in contract enforcement and disposal resolution are arguably now the single biggest hurdle to the Ease of Doing Business in India," says the survey.

"This is not surprising given the 3.5 crore cases pending in the judicial system. Much of the problem is concentrated in the District and Subordinate courts where 87.5 per cent of cases are pending," adds the survey.

The survey suggests that addition of mere 2,279 judges in the lower courts, 93 in high courts, and just one in the Supreme Court could bring the case clearance rate of Indian legal system to 100 per cent, which means zero accumulation of cases.

"Simulations of efficiency gains and additional judges needed to clear the backlog in five years, suggest that the numbers are large but achievable," states the Survey.

According to the Survey, the necessary productivity gains at a full sanctioned strength of judges is 24.5 per cent in the lower courts, 4.3 per cent in High Courts and 18 per cent in the Supreme Court.

A case type analysis further revealed that pendency of cases is highly skewed towards criminal cases in lower courts.

"Criminal original suits contribute 64 per cent of the total pendency as of May 31, 2019, with a clearance rate of 85.3 per cent," says the Survey.

It further suggests that additional judges are required to specialize in such type of cases for enhancing the disposal rate of such cases.

The Survey also highlights that owing to their low clearance rates, priority should be given to Uttar Pradesh, Bihar, Odisha, and West Bengal during the appointment of additional judges.

The Survey suggests that the number of working days must be increased for enhancing productivity in the judiciary and Indian courts and tribunal services must be established for focusing on the administrative aspects of the legal system.

Stating examples of eCourts Mission Mode Project and the National Judicial Data Grid being rolled-out in phases by the Ministry of Law and Justice, it states that deployment of technology to improve the efficiency of the courts.

The Survey further highlights the impact of Insolvency and Bankruptcy Code and Goods and Services Tax (GST) on the improvement of the country's EoDB ranking, which jumped to 77 from 142 in the last four years.

-ANI

Also Read: Economic Survey 2018-19: Key Points on India's External Debt, Industry, and Export