One of the biggest needs for the growth of the country is the economy. It is something that most countries would love to do that but they fail to do so. One example is Venezuela, a country which was once one of the richest countries in the world[i] and as of now its citizens couldn’t even access basic necessities like toilet paper[ii] because of the poor governmental policies and legal system that has led to an economic crisis[iii].
The former Soviet Union should be taken as an another example. It’s rigorous arms spending, ineffective policies, lack of innovative ideas, War in Afghanistan etc. has let to the stagnation of its economy and eventually its demise in 1991[iv].
Another aspect that most countries tend to forget that for a stable economy and economic development, there should be a stable legal system. If the legal system is unstable then there is a possibility that a country will collapse.
Let’s bring the context to India. India’s economic growth began with the reforms that came In 1991. The reforms that changed the shape of the economy by transitioning to the free market has made India a global economic power.[v] The school textbooks call this reform as the New Economic Policy and its features like globalization, liberalization, privatization, modernization and the rise of new public sector has changed the shape of the Indian Economical development[vi].
However with a boon also comes with a bane. Let’s take an example of Video Games industry. Video Game corporations like Electronic Arts has been accused of aggressive monetizing their items which is know as loot-boxes and because of the lack of laws regulating such monetization, they were able to rob the consumers through this tactic. A tactic which is considered as anti-consumer[vii]. However with the aftermath of Star Wars Battlefront II controversy in 2017, the Belgian government banned the loot-box system, the Dutch Government fined the company in question (EA) for its aggressive monetization and in the US, Hawaiian lawmakers and state representatives denounced the system by calling it an “online gambling cantina to make kids spend their money”[viii]
Looking at the above example, we can say that new problems could be created in the name of economic development-
1. There has been a significant rise of economic crimes ever since the reforms came into being. Few of the most notable cases are the Harshad Mehta Scam, The Nirav Modi scam, The Vijay Mallaya Scam and so on.
Harshad Mehta who was once called “The Amitabh Bachchan of Stock Exchange” scammed not only government and private banks but also other government/private agencies and companies like Tata, Apollo, ACC, Hero Honda and so on. In 1992 his illegal schemes were eventually exposed by veteran journalist Sachita Dalal and with the involvement of RBI and CBI, he and his brothers were arrested. Estimates suggest that the amount of money counted in this scam was Rs 3,500 crores.[ix] Because of this Securities Law (Amendment) Act 1995, came into force which brought various regulations on venture funds, company disclosure and FII.[x] And the scam also led to the strengthening of government agencies like SEBI.[xi]
2. When the industrialization was at its prime, various questions are being raised regarding the rights, well beings and the safety of the workers and employees. The workers expressed their concerns that they could be exploited by the employers and the top echelons of the industry. For example, they could be paid sub standard wages, they couldn’t receive any compensation in the cases of death or injury, they won’t get any perks, benefits or leaves. Any dissent they show through trade unions are subjected to suppression by the employer[xii].
So in India, various laws were brought up so that the workers would enjoy safety and leave benefits and other perks. They and their family members are being compensated after any injury or death and their wages are paid on time and are paid under the provisions of the law. Also any dispute between the employers and the employees are being resolved through legal means either by tribunals or courts. So the laws like The Trade Unions Act 1926, Industrial Dispute Act 1947, The Factories Act 1948[xiii] etc. provide support to the workers and also make sure that their relationship with the employers remain healthy.
3. In a capitalist state, one of the major problems faced by the masses is the rising inequality. The widening gap of rich and poor increases every time the country’s economy increases. One example is the US during the Reagan Administration. During the 1980s the term Reaganomics was a popular term to describe the American Economy during the presidency of Ronald Reagan. Although the US economy did flourished during the Reaganomics, the National Debt of the US has increased from US$997 billion to US$2.857 which led to the increase in poverty.[xiv]
Thus it explains the adage of “The Rich became Richer and the Poor became Poorer”. This is the same thing in India. With the reforms in 1991, the class divide became bigger and the class relations of rich and poor soured. If we look in the history, the legal system has been in favor of the rich. Let’s give the example of say, Salman Khan who is one of the most popular of the Bollywood Elites and he is also one of the most controversial. His two high profile cases i.e. The Blackbuck Case[xv] and the Hit and Run Case, where he got out scot free with some hefty albeit minor charges which exposes everything that is to say about the current justice system in India[xvi]. The rich especially the politicians, celebrities, media person, business person, sportsman and many other influential and authoritative people (even their children) can just get away with anything because they have power, money and influence if they commit any crime whereas the poor will have to face the “longer” judicial process. All they get is taareek pe taareek (date to date), trust, documents but not justice. No wonder why people say “justice delayed is justice denied”
The poor also felt cheated by the political masters and echelons, who only use them for their own benefits. They are also disillusioned with their false promises and their lack of vision regarding the long term benefits of the poor[xvii] as they want to be on the good sides of the corporations and conglomerates.
But there is something that even the rich can’t steal from the poor. Their Fundamental Rights. The Fundamental Rights given by our Constitution of India. And if their rights are violated by someone or something or even by the government then they can go the courts to seek remedies under Article 32. And then there are also the Lok Adalats which was mentioned in Article 39-A of the Indian Constitution. The Lok Adalats are not only an advantage to the poor but also they serve as the bastion of speedy justice[xviii].
4. The Agricultural Sector which the 58% of the populace’s occupation is depended on, is the foundation of the country. The GVA (Gross Value Added) of the area is Rs 19.48 Lakh Crores (US $276.37 Billion). Anyway the sector is defenseless against different issues like absence of agrarian space, monetary funding’s just as decay of assortments, dependence of counterfeit other options and restricted assets. This has an immense effect on the farmers which they have to deal with their own problems like debt traps, lack of awareness, crisis in the waters and vice versa[xix].
As of now, The Farmers Protest which has escalated this year is a proof of disconnect with the government and the farmers. In 2020, the government has passed 3 laws i.e. Farmers’ Produce Trade and Commerce (Promotion and Facilitation), Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act and the Essential Commodities (Amendment) Act. Critics of the 3 laws particularly the oppositions party (who believe that the companies and corporations would exploit the farmers[xx]) and the farmers believe that the 3 laws are made as an excuse to remove the Minimum Support Price (MSP). The MSP rate is the type of payment where the government used to buy the farmers’ produce at the fixed rate. The Farmers are afraid that the removal of the MSP will mean that the rich and the conglomerates will buy the produce from the farmers at any rate which could be misused by the former.[xxi]
In any case, there must be an open dialog between the government and the farmers so that they could resolve this issue sooner and more civil manner. Both parties have to ensure that the protest does not turn into a violent riots which could cause a lot of casualties. As for the laws, the Apex Court must review the laws and give their own judgement whether the laws are discriminatory against the farmers in nature or not.
5. There are also rising concerns regarding the degradation of the environment due to the various developmental projects. This not affects the plants but people, animals, monuments and vice versa. The Taj Trapezium Case is one of the many examples on how the environment degradation has an affect on major tourist attraction. Long story short the factories surrounding the Taj Mahal, is affecting its white marble in a harmful manner. So the Supreme Court decided that the factories should shift to further areas so that it could not harm the white marble of one of the seven wonders of the world[xxii].
The Arrey Forest which is considered as the Green Lungs of Mumbai, is on the danger of deforestation. The reason is that, the Bombay High Court has allowed the construction of the Mumbai Metro which has led to protest by the Bollywood celebrities like Amitabh Bachchan and common people[xxiii].
With Climate Change and Global Warming turning into an enormous hazard, it is essential to be noticed that Sustainable Development ought to be actualized. The current assets ought to be saved so it very well may be utilized by the ages to come. There is likewise the need to utilize gases like CNG, and with the utilization of substance manures utilized by the ranchers turning into a developing concern, earthy person has proposed to utilize natural cultivating technique which is much more compelling and climate amicable[xxiv].
It is said that law and economics have a close relationship as they are interdependent on each other. We all agree that India’s economy must develop so that it could match the likes of the United States, China, South Korea, Japan, UK, Russia and the EU. However with the rising problems, we should also agree that India’s legal system need massive improvement. Furthermore the law should act as a deterrent against any wrongdoings under the guise of economic development so that they ensure that India’s growth is healthy.
India is a potential superpower and in a few years if changes do come for the people from different walks of life then maybe in few years or decades, she could become a superpower. It took lots of years for the United States to become a superpower and yes, it will be a long road for her to become a superpower however, it will happen. It is inevitable. So it is important for people to do everything to make India a more economic efficient, more tolerant and maybe a bastion of justice as it is the bastion of the 21st century democracy.
[i] Margolis, J., 2019. Venezuela was once the richest, most stable, democracy in Latin America. What happened?. [online] The World from PRX. Available at: <https://www.pri.org/stories/2019-02-07/venezuela-was-once-richest-most-stable-democracy-latin-america-what-happened#:~:text=Venezuela%20was%20also%20rich,%20very%20rich,%E2%80%94%20the%20wealthiest%20nation%20in%20Latin%20America.> [Accessed 7 February 2019].
[ii] Kass, J., 2016. Venezuelan toilet paper shortage an unwelcome symptom of socialism. [online] chicagotribune.com. Available at: <https://www.chicagotribune.com/columns/john-kass/ct-venezuela-toilet-paper-shortage-kass-0226-20160225-column.html> [Accessed 25 February 2016].
[iii] Kiger, P., 2019. How Venezuela Fell From the Richest Country in South America into Crisis. [online] HISTORY. Available at: <https://www.history.com/news/venezuela-chavez-maduro-crisis> [Accessed 9 May 2019].
[iv] Bachchan, A. and Yadav, A., 2020. The Dissolution of the Soviet Union. [online] Legalserviceindia.com. Available at: <http://www.legalserviceindia.com/legal/article-4226-the-dissolution-of-the-soviet-union.html> [Accessed 29 November 2020].
[v] The Economic Times. 2018. 1991 reforms led to India’s transformation as a global economic leader: Manmohan Singh. [online] Available at: <https://economictimes.indiatimes.com/markets/stocks/news/1991-reforms-led-to-indias-transformation-as-a-global-economic-leader-manmohan-singh/articleshow/65319704.cms> [Accessed 8 August 2018].
[vi] PreserveArticles.com: Preserving Your Articles for Eternity. n.d. What are the main Features of New Economic Policy of India?. [online] Available at: <https://www.preservearticles.com/articles/what-are-the-main-features-of-new-economic-policy-of-india/7623> [Accessed 4 February 2021].
[vii] Bachchan, A., 2020. Video Games: An Overview. [online] Legalserviceindia.com. Available at: <http://www.legalserviceindia.com/legal/article-4271-video-games-an-overview.html> [Accessed 4 February 2021].
[viii] Bachchan, A., 2021. Current Issues that Plagued the Video Game Industry. [online] Medium. Available at: <https://anishbala147.medium.com/current-issues-that-plagued-the-video-game-industry-5067de7db0a9> [Accessed 7 January 2021].
[ix] Prasad, P., 2020. Where is the Rs 24,000 Cr Lost in Harshad Mehta Securities Scam?. [online] TheQuint. Available at: <https://www.thequint.com/explainers/where-is-the-rs-24000-crore-lost-in-the-harshad-mehta-securities-scam#read-more> [Accessed 4 February 2021].
[x] Patil, R., 2020. How investment climate has changed after Harshad Mehta scam broke in 1992. [online] Msn.com. Available at: <https://www.msn.com/en-in/money/topstories/how-investment-climate-has-changed-after-harshad-mehta-scam-broke-in-1992/ar-BB19SWMr> [Accessed 4 February 2021].
[xi] DUCTUS LEGAL (MERGED, QUAD LEGAL, NEW DELHI). 2016. HARSHAD MEHTA SCAM AND EVOLUTION OF SEBI. [online] Available at: <https://mehtadixit.wordpress.com/2016/11/05/harshad-mehta-scam-and-evolution-of-sebi/> [Accessed 4 February 2021].
[xii] Ekka, A. (2020, June 11). Introduction to Labour Laws: Scope and Development. Legal Bites – Law And Beyond. https://www.legalbites.in/introduction-labour-law-scope-development/
[xiii] Bansal, N. (2020, June 11). Development of Industrial Legislation in India. Legal Bites – Law And Beyond. https://www.legalbites.in/development-industrial-legislation-in-india/#disputesact
[xiv] By Staff Writer. (2020, March 24). What Are the Long-Term Effects of Reaganomics? Reference.Com. https://www.reference.com/history/long-term-effects-reaganomics-58768bdb9fdbf52c
[xv] Online, F. E. (2016, July 25). A teflon Salman Khan: Actor gets away in poaching case. The Financial Express. https://www.financialexpress.com/opinion/a-teflon-salman-khan-actor-gets-away-in-poaching-case/328751/
[xvi] Lall, R. R. (2015, May 13). Salman Khan case exposes the state of injustice in India. The National. https://www.thenationalnews.com/opinion/salman-khan-case-exposes-the-state-of-injustice-in-india-1.129313
[xvii] Sah, A. (2019, March 31). Widening Rich-Poor Wealth gap in India with rich getting richer. Timeslifestyle. https://www.timeslifestyle.net/rising-rich-poor-wealth-gap-in-india/#:%7E:text=Widening%20gap%20between%20Rich%20and%20Poor%20will%20cause,Unstable%20growth%20will%20also%20lead%20to%20environmental%20degradation.
[xviii] Parveen, G. (2019, November 12). Lok Adalats in India: Apertures to Speedy Justice. IPleaders. https://blog.ipleaders.in/lok-adalats-india-speedy-justice/
[xix] Team, C. I. (2021, January 6). Farmers’ Suicides in India – Reasons and Responses. ClearIAS. https://www.clearias.com/farmers-suicides/
[xx] Online, E. T. (2021, February 4). Everything you need to know about the farm laws that farmers are protesting against. The Economic Times. https://economictimes.indiatimes.com/news/economy/agriculture/everything-you-need-to-know-about-the-new-agriculture-bills-passed-in-lok-sabha/articleshow/78183539.cms
[xxi] India.com News Desk. (2020, December 9). Explained: Why are Farmers Protesting And What’s Their Disagreement With Centre’s Farm Laws? India News, Breaking News | India.Com. https://www.india.com/news/india/farmers-protest-explained-farm-laws-disagreements-government-provisions-4254323/
[xxii] Kothari, I. (2020, August 31). Taj Trapezium Case | Lawsisto Legal News. Taj Trapezium Case. https://lawsisto.com/legalnewsread/Nzg3NQ==/Taj-Trapezium-Case
[xxiii] A. (2019, October 7). AAREY FOREST – Development or Deforestation? Param Realty Blog. http://www.paramhomes.com/blog/aarey-forest-development-or-deforestation/
[xxiv] Indian Economy – Sustainable Development – Tutorialspoint. (n.d.). Indian Economy – Sustainable Development. https://www.tutorialspoint.com/indian_economy/indian_economy_sustainable_development.htm
This article has been authored by Anish Bachchan, law student at Amity Law School.
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