The Indian state’s inability to enforce contracts and resolve disputes is one of the biggest stumbling blocks to the ease of doing business.
This survey should tell the government exactly what needs to be done and where its investment is required.
The Economic Survey 2018-19 has identified the judiciary as one of the key areas for the government to focus on.
‘Given the potential economic and social multipliers of a well-functioning legal system, this may well be the best investment India can make,’ the survey says.
Around 3.5 crore cases are pending in India’s courts. Out of these, 3.1 crore cases are stuck in the lower judiciary — the District and Subordinate (D&S) courts.
The average age of pending cases in five states — Odisha, Bihar, West Bengal, Uttar Pradesh and Gujarat — is higher than the national average. Except for Gujarat, the rest are some of the poorest states in the country.
It also shows that economic prosperity may not lead to a better legal system but the reverse is true. Gujarat’s prosperity is irrespective of its legal system because of its unique pro-business culture.
The survey rightly points out that the Indian state’s inability to enforce contracts and resolve disputes is one of the biggest stumbling blocks to the ease of doing business. While India has made tremendous progress on almost each indicator of the World Bank’s ‘Ease of Doing Business’ rankings in the last five years, its performance on ‘enforcing contracts’ is terrible — standing at 163rd position in the world.
Consider these numbers presented by the survey:
- More than 64 per cent of all cases are pending for more than one year;
- The disposal time for majority of the cases is three years (for instance, 74.7 per cent of the civil cases and 86.5 per cent of the criminal cases are disposed within three years). When we compare this to international standards we find that the average disposal time for civil and criminal cases in India is 4.4 and 6 times more respectively than the average of the council of Europe members.
- CCR or Case Clearance Rate (percentage of cases disposed — old or new — vs total number of new cases instituted in a year) for the lower courts in India is 88.7 per cent, meaning that as long as we don’t achieve at least a 100 per cent rate, there is no hope of clearing the backlog and pendency will keep on increasing.
So, what’s the solution?
The survey analyses data about pending cases, CCR, current judge strength at various levels and concludes that 100 per cent clearance rate can be achieved by just filling the sanctioned vacancies in courts. This will put a complete stop to pendency. The problem of cases pending for previous few years can also be solved easily in five years by making small investment in increasing judges strength at lower level.
Around 1.5 crore new cases were filed in the lower courts in 2018. Out of these, 1.33 crore were disposed by 17,891 judges at the rate of 746 cases per judge. This means that if we had 2,279 more judges (i.e. total 20,170), we would’ve achieved 100 per cent clearance rate.
Now, the sanctioned strength of judges for lower courts is 22,750. If our courts were running at its sanctioned capacity, then we would not have created any pendency in 2018 and we would have actually cleared around 20 lakh pending cases as well. In fact, we can clear all the pending three crore cases by investing in appointing 8,152 new judges. This is assuming that the system works at the current efficiency level.
Increasing strength is not the only way. Alternatively, the government can focus on improving the efficiency of the courts. The survey states that efficiency gain of 24.5 per cent is needed to clear backlog of the lower courts in five years if they work at sanctioned strength (at the current strength, a gain of 58 per cent is needed — this is an uphill task and it shows that the government will have to at least fill up all the vacancies).
The survey suggests two ways to increase efficiency — by deploying technology in the administration of the courts and by establishing a specialised cadre of officers who exclusively focus on the administrative aspects of the lower courts. Currently, the chief judicial officer has to bear this responsibility while his time should actually be devoted to disposing cases.
At the high court level, the problem of pendency is even easier to solve. 17.93 lakh new cases were filed into the system in 2018. Around 15.75 lakh cases (old and new) were disposed by 671 judges at the rate of 2,348 cases per judge.
If we had 93 more judges (i.e. a total of 764 judges) then we would’ve achieved 100 per cent clearance rate. Sanctioned strength of high courts is 1079. Again, if we had that many judges (i.e. 315 more judges) in 2018, we would’ve reduced the backlog by 7 lakh cases. All the backlog of over 44 lakh cases can be cleared in just five years by appointing 365 new judges.
The Supreme Court is already running at 100 per cent CCR. It only needs to have eight more judges to clear its backlog in five years.
The survey has not only focused on increasing strength and efficiency of the courts but has gone deeper into analysing the data in a thorough manner to identify which types of cases are contributing more to pendency. It also pinpoints exactly at which stage of the cases delays are occurring. This analysis is important because it tells us what types of judges the courts need and what process improvements can fast track these cases.
The data shows that as far as lower courts are concerned, criminal cases are the main culprits behind a ballooning backlog — civil cases only contribute 28.38 per cent of the total pendency. Delving deeper, one finds that contribution of warrants/summons to the backlog is at 56.63 per cent followed by that of civil suits (14 per cent), and criminal application (5.8 per cent), and so on.
A look at the clearance rate of difference cases shows that it is low for marriage petitions (86.88 per cent) but very high for motor vehicles (107.58 per cent) and land references (192.66 per cent).
Life cycle analysis of cases done by the survey shows that some stages during the cases take much more time than others, and we will have to go in for police reforms as well — especially given the fact that criminal cases are contributing a major share to pendency. Additionally, we will need to focus more on improving the conditions of the lower judiciary in the Eastern states (which are also one of the poorest) because the data shows they perform much worse than others on many indicators.
This exhaustive analysis done by the survey should tell the government exactly what needs to be done and where its investment is required. It should get cracking on the problem as soon as possible.
As the survey says, “This may well be the best investment India can make.”