Case studies on the Indian economy
An attempt at understanding India’s economic policy landscape through the prism of 15 important judgements delivered by the country’s apex court is a novel and useful exercise. Saurabh Kirpal, a practising lawyer of repute who has been in the news for a variety of reasons, has written an interesting book to present that unique perspective. His book offers a glimpse into how some of the major economic policy decisions in independent India evolved and passed the test of judicial review.
But what stands out in Mr Kirpal’s recounting and analysis of those 15 judgements is the rather stressful and often fraught relationship between the Supreme Court and the Union government over these years.
Each of the 15 chapters in the book is focused on first explaining the economic and political backdrop against which the issue came up before the apex court and subsequently analysing the judgement in layman’s language. This analysis is extremely helpful in understanding the third segment of the chapters, where Mr Kirpal provides his own perspective of the judgements.
The author rightly argues that most economic laws in india use a complex web of words and jargon that make them inaccessibletomostpeople.in comparison, the language used in the Supreme court judge men ts is far simpler, setting the context and explaining why a certain order was framed the way it was. There are exceptions of course; mr kirp al quotes a few judge men ts that areas opaque as the text of most economic laws. Mercifully, there are few such judge men ts.
As many as 14 of the 15 judgements that Mr Kirpal highlights in his book were passed after 1970 or in the past 52 years. The only other judgement that figures here was passed 72 years ago, but it was arguably the most significant of all the orders analysed by the author. In 1950, the Supreme Court heard an appeal against the order of the Patna High Court that had struck down the Land Reforms Act of 1950 as unconstitutional. The law allowing acquisition of land by paying compensation was aimed at abolishing the zamindari system, but that decision also struck at the root of the fundamental right to property.
But before the appeal was heard by the Supreme Court, the Nehru government had amended the Constitution by assuming powers to acquire any property or estate and by placing land reform laws in a new section —the Ninth Schedule, which kept all laws placed under it beyond any judicial review. This was the first amendment to the Constitution.
The author’s commentary on the sequence of events is instructive. While this was the first assault on the right to property, it also paved the way for the state to gradually place many other laws under the Ninth Schedule to escape judicial review. The implications of this change for economic policies and the citizen’s rights over the next many decades have been huge.
Some of the more important judgements discussed in this book pertain to bank nationalisation of
1969, London-based non-resident Indian Swraj Paul’s bid to take over Escorts, the privatisation of Balco, women’s rights in the workplace, gas pricing by Reliance, Vodafone’s retrospective taxation, the 2G spectrum controversy, the mining ban in Goa, the challenge to the Insolvency and Bankruptcy Code and the ban on cryptocurrencies. Each of these chapters provides a riveting account of the origins of the controversy and how the government and the apex court handled it.
What comes through quite clearly from many of these judge men ts is that the government of the day does not lose much time changing its laws in the wake of lower court judge men ts that might go against its ownpolicies.the adverse verdicts from the pat na high court on the land reform law, thebank national is at ion law or the retrospective amendment of the taxation law imp acting vodafone’ s acquisition in india are examples of how the government has over these years pro actively changed laws to secure a favour able verdict from the Supremecourt.
A look at these 15 judgements will also indicate how even the judiciary has changed its political preferences over time. In the days of socialistic economic policies, the Supreme Court’s judgements allowed what was clearly an attack on the right to property or would result in the state taking over banking assets. But the judiciary’s approach to economic policies changed after the reforms of the 1990s when, for instance, privatisation was endorsed by the apex court.
But as Mr Kirpal rightly concludes, the Supreme Court has so far refrained from taking any step that would amount to changing the government’s policies in the areas of environment and corruption. The Goa mining case is an example. But as evident in the 2G spectrum allocation case, the judiciary did not stop at just declaring the decision invalid, but went a step further by cancelling the licences, creating further problems in the telecom sector. Equally unclear has been the judiciary’s approach to the debate over individual rights versus the interests of the state, as seen in its verdict on the Aadhaar Act.
Understanding the context in which these judgements were passed may not trace the entire economic history of the country. But it will certainly help you track the many turns and twists of India’s economic policy-making — from a relatively free enterprise environment to socialism and to the era of economic liberalisation.