The government’s efforts to make business and commerce easy have been widely acknowledged. The next frontier on the ease of doing business is addressing pendency, delays and backlogs in the appellate and judicial arenas. These are hampering dispute resolution and contract enforcement, discouraging investment, stalling projects, hampering tax collections but also stressing tax payers, and escalating legal costs.
Coordinated action between government and the judiciary-a kind of horizontal Cooperative Separation of Powers to complement vertical Cooperative Federalism between the central and state governments would address the “Law’s delay” and boost economic activity.
India jumped thirty places to break into the top 100 for the first time in the World Bank’s Ease of Doing Business Report (EODB), 2018. The rankings reflect the government’s reform measures on a wide range of indicators. India leaped 53 and 33 spots in the taxation and insolvency indices, respectively, on the back of administrative reforms in taxation and passage of the Insolvency and Bankruptcy Code (IBC), 2016.
It also made strides on protecting minority investors and obtaining credit, and retained a high rank on getting electricity, after a 70 spot rise in EODB, 2017 due to the government’s electricity reforms. This year’s report did not cover other measures such as the Goods and Services Tax (GST), which are expected to further boost India’s ranking in the coming years.
PENDENCY AND DELAY: FACTS
Analysis of six prominent appellate tribunals that deal exclusively with high stakes commercial matters reveal two patterns. First, there is a high level of pendency across the six tribunals, estimated at about 1.8 lakh cases. Second, pendency has risen sharply over time.
Further, the creation of tribunals at different points in time did not alter pendency at the High Courts of the country nor their ability to deal with other economic cases. Three sets of economic cases pending at five High Courts were studied for the Economic Survey: company cases, arbitration cases and taxation cases.
The overall pendency of the High Courts and the case-wise pendency of these economic cases at High Courts continue to increase. The total backlog in High Courts by the end of 2017 as per the National Judicial Data Grid was close to 3.5 million cases.