GDP and Our Judges
Aug. 10, 2022

Context

  • A Supreme Court bench recently proposed that an expert committee of Election Commission, Finance Commission, NITI Aayog and RBI officials alongside political representatives must look into the economic impact of freebies doled out by governments.
  • However, this judicial intervention overlooks the government’s economic imperatives i.e. accountability to citizens for providing them a good standard of living.

Piling costs of judicial overreach

  • Mopa airport case, 2019: The SC suspended the Environmental Clearance (EC) and stopped work on the Mopa Airport, Goa despite the Environment Assessment Committee and NGT following a due process and ruled in favour of an EC being awarded.
    • This adversely impacted infrastructure creation, travel and tourism.
  • Goa Foundation vs Sesa Sterlite case, 2015: The SC while examining the validity of mining leases, observed that “rampant exploitation of our natural resources” was the “hallmark” of the state’s iron ore industry.
    • This seemed unfair, when the mining industry is a major contributor to GDP, job creation and state revenues.
    • Moreover, mining is today feasible in the most sustainable manner through use of technology. But it has been halted for over four years and a vast number of jobs have been lost.

Weighing SC judgments

  • Climate of uncertainty: The SC must evaluate the economic implications of its verdicts which mustn’t be a strain on the nation’s development prospects.
    • For example, in 2022, SC directed CBI to inquire into the two decade-old strategic disinvestment of Hindustan Zinc Limited. Such an order could potentially halt GoI’s asset monetisation or strategic disinvestment plans.
  • Threat of criminality: Courts must accept and protect bona fide decision-making by civil servants instead of reopening settled verdicts that already passed the litmus test. It would otherwise hamper progressive decisions of civil servants with the threat of criminal proceedings looming.
    • For instance, former SBI chairman Pratip Chaudhuri, long after his retirement was arrested on a magistrate court’s order, without issuing summons for an asset reconstruction case. Ironically, the right forum to hear that matter was NCLAT.
  • Contemplation: The judicial interventions require further deliberation on various aspects like external expertise, new assessment framework, and a macro-perspective.

The long view on environment, economy

  • The setback caused to economic growth by Covid-19 pandemic and complex environmental decision making induced by climate change has made political executives concerned about both economy and environment.
  • The judicial interventions have also caused long-term impacts on economic growth. The one-sided approach without factoring longer-term economic growth prospects balanced by climate and environment concerns could be detrimental in the long-run.
  • Government of India has thus taken the lead in renewable energy, electric vehicles, addressing climate change, and meeting SDGs.

Desired response of SC in economically crucial cases

The following threefold path can help address both economic and environmental concerns and avert the courts acting arbitrarily against government decisions:

  • Charting roadmap from precedents: In the Shivashakti Sugars Limited vs Shree Renuka Sugar Limited verdict, SC observed the following:
    • The economic impact and effect of a decision ought to be kept in mind.
    • The court emphasized to avoid that particular outcome which has a potential to create an adverse effect on employment, growth of infrastructure or economy or the revenue of the State.
  • Cost benefit analysis: Applying an economic impact analysis must become a fundamental process for judges to arrive at responsible and sustainable judgments.
  • External expertise: Institutionalisation of dispute assessment through an independent committee of experts from diverse subject backgrounds assisting the court can help balance its final assessment by offering quantifiable analysis.