♣ 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.

♣ The importance of an effective, efficient and expeditious contract enforcement regime to economic growth and development cannot be overstated.

♣ A clear and certain legislative and executive regime backed by an efficient judiciary that fairly and punctually protects property rights, preserves sanctity of contracts, and enforces the rights and liabilities of parties is a prerequisite for business and commerce.

♣ The government has taken a number of actions to expedite and improve the contract enforcement regime.

♣ For example, the government: scrapped over 1000 redundant legislations; rationalized tribunals; amended The Arbitration and Conciliation Act, 2015; passed The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015; reduced intra-government litigation; and expanded the Lok Adalat Programme to reduce the burden on the judiciary.

♣ However, economic activity is being affected by the realities and long shadow of delays and pendency across the legal landscape.

♣ The finds are simple and stark

  • Delays and pendency of economic cases are high and mounting in the Supreme Court, High Courts, Economic Tribunals, and tax Department, which is taking a severe toll on the economy in terms of stalled projects, mounting legal costs, contested tax revenues, and reduced investment more broadly
  • Delays and pendency stem from the increase in the overall workload of the judiciary, in turn due to expanding jurisdictions and the use of injunctions and stays;
  • In the case of tax litigation, this stems from government persisting with litigation despite high rates of failure at every stage of the appellate process; and
  • Actions by the Courts and government acting together can considerably improve the situation.

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May 2021