Economic Survey 2018-19 calls for improvement in contract enforcement regime

‘Economic activity affected by delays across legal landscape’

Published - July 04, 2019 10:03 pm IST - New Delhi

Contract enforcement remains the single biggest constraint to improve India’s Ease of Doing Business (EODB) ranking, which currently stands at 163 in the world ranking, the Economic Survey 2018-19 said.

It remarked that in spite of a number of actions to expedite and improve the contract enforcement regime, economic activity was affected by the long shadow of delays and pendency across the legal landscape.

Noting that the relationship between economic governance and the rule of law (Dandaniti) is the key to prosperity, and a bulwark against Matsyanyaya (law of the fish/jungle), the survey said two key issues need to be dealt with in order to make the judiciary more efficient and to clear the ‘legal logjam.’

Firstly, the courts must achieve a 100% case clearance rate (CCR) so that there is zero accumulation to the existing pendency. Secondly, the backlog of cases already present in the system must be removed.

CCR is the ratio of the number of cases disposed of in a given year to the number of cases instituted in that year.

District and Subordinate (D&S) courts, which account for the bulk of pendency, received 1.5 crore additional cases in 2018 and had a backlog of 2.87 crore (as on January 1, 2018).

But it managed to dispose of 1.33 crore cases in the year, thus, closing 2018 at 3.04 crore.

There are currently 17,891 judges compared to the sanctioned strength of 22,750. On average, a judge disposes of 746 cases.

“In order to reach 100% CCR in 2018, the D&S courts needed 2,279 additional judges. This is within the sanctioned strength! However, in order to clear all the backlog in the next five years, a further 8,152 judges are needed,” the survey said.

It suggested improving the efficiency of the courts, increasing number of working days of courts, establishment of Indian Courts and Tribunal Services, and deployment of technology in legal system.

“Given the potential economic and social multipliers of a well-functioning legal system, this may well be the best investment India can make,” it said.

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