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News: A recently released paper titled Jailed for Doing Business by Gautam Chikermane of Observer Research Foundation and Rishi Agrawal of Teamlease Regtech has documented the jail provisions faced by Indian entrepreneurs.
This article discusses the difference between Niti and Nyaya while discussing the over-regulation in Indian economy.
What does the research paper reveal?
There are around 1,536 laws in seven categories to jail the employers. Around 843 laws are consequential and they have 26,134 criminal provisions. Also, one law has 700 ways in which a business person can end up in jail.
How the disagreement between Niti (policy) and Nyaya (justice) grew?
One, Mahatma Gandhi had pleaded guilty to sedition charges in 1922. He said that the mere existence of a procedurally legitimate law is not enough. It must have the moral authority to rule.
Two, in the late 1940s, US Supreme Court Justice Felix counselled B.N Rau (constitutional advisor) that India would be best served without a clause for “due process”.
Hence, India adopted “procedure established by law” from the Japanese Constitution. This has resulted into over-regulation and over-emphasis on Niti. For example, 26,134 criminal provisions for employers in India.
Three, Indian Constitution lack a due process clause. Article 21 of the Indian Constitution states that “No person shall be deprived of his life or personal liberty except according to procedure established by law”.
Supreme Court interpreted it in A.K. Gopalan in which he challenged his detention under Article 32.
He argued that he had a fundamental right under Article 21 not to be deprived of his personal liberty except “according to procedure established by law”.
However, the Supreme Court rejected Gopalan’s arguments. The court said that only the legislature can decide the adequacy of procedures, and courts would not go into reasonableness and fairness. Hence, it gave preference to the legislature’s wisdom.
How this difference is narrowed down?
One, the Supreme Court overruled the Gopalan case verdict in 1978. It held that the procedure established by law should not be unfair, fanciful, or arbitrary.
Two, after 2017 the test of constitutionality includes, whether Parliament has the legislative competence to enact a law on the subject, whether the law violates fundamental rights or any other provision of the Constitution and whether the legislation passed by Parliament is arbitrary.
What is the way forward?
First, India will soon become third in the world’s gross domestic product (GDP) rankings, but due to low productivity, it stands at 138th in per capita GDP. So there is a need to change how land, labour, and capital combine to create well-paying jobs, livelihoods, and businesses.
Second, entrepreneurship is growing in India, but regulatory cholesterol (Niti) ensures that most employers remain dwarfs. It shows that cost of Niti is poor economic Nyaya which manifests itself in the form of corruption, low wages, and low productivity. Hence, they must be relooked.
Three, Krishnadevaraya of Vijayanagara was inspired by Telugu political theorist Badenna, who believed “Justice is the way to make the people prosper and the people’s prosperity is the way to wealth”. Hence, emphasis should be given to Nyaya over Niti.
Source: This post is based on the article “Niti versus Nyaya: When policy provisions deny people justice” published in Livemint on 15th Feb 2022.