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: In attaining higher GDP growth rates, legal reforms are now recognised as a critical ingredient. In a somewhat belated official recognition of the importance of legal reforms, Economic Survey 2004-05 had a section on the infrastructure of contract enforcement. The Indian legal infrastructure needed reforms in any case, even if the post-1991 cycle of economic reforms hadn’t occurred. However, liberalisation has provided an additional trigger.
The word ‘law’ has various interpretations. Consequently, the expression ‘legal reform’ also needs to be pinned down. There are three layers in legal reform. First, there is an element of statutory law reform and there are three clear elements to statutory law reform—weeding out old and dysfunctional elements in legislation, unification and harmonisation and reducing state intervention. Second, legal reform has to have an administrative law reform component, meaning the subordinate legislation in the form of rules, orders, regulations and instructions from ministries and government departments. Often, constraints to efficient decision-making come about through administrative law rather than through statutory law and bribery and rent-seeking are fallouts. Finally, the third element of legal reform is what may be called judicial reforms, though faster dispute resolution and contract enforcement are not exclusively judicial issues.
In reform initiatives since 1991, judicial reform has often remained outside substantial liberalisation initiatives. “If there is one sector which has kept away from the reforms process it is the administration of justice.” This is despite the problem being recognised. “There was, no doubt, a time when judiciary was highly respected by the people who had faith in the quality of justice, dispensed with promptly by the judges. Now the people have started loosing (sic) faith in the entire judicial system because of every day increasing arrears… It is a usual phenomenon to hear the conversation between suitors that they are not likely to reap the fruits of litigation during their life time. Eminent jurists have gone even to the extent of observing that our justice delivery system is cracking under the oppressive weight of delay and arrears. It has been repeated ad nauseam that to delay justice is to deny justice…. From time to time, public attention has been drawn to this sorry state of affairs and though the matter has been frequently discussed both in the Parliament and outside, yet the problem has defied any solution. Pandit Jawaharlal Nehru, while addressing a conference of State Law Ministers...
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