Stressing the importance of the rule of law for ensuring economic growth, Finance Minister Pranab Mukherjee on Sunday said only states that ensured smooth land acquisition and enforcement have attracted more foreign investment than states that have not.
Addressing the valedictory function of the conference on 'National Consultation for Strengthening the Judiciary Towards Reducing Pendency and Delays' in New Delhi, Mukherjee said: "Some states, which had ensured smooth law acquisition and enforcement of law have attracted foreign direct investment (FDI) more than other states."
He said foreign investors always weighed the cost of capital and delays in courtroom led to additional cost in investment, which repulsed FDI.
Noting that delays in courtroom had led to corruption, lack of investment and inflation, the minister said the delays were the main reason for judiciary eating up two per cent of the Gross Domestic Product of the country.
"Taking law in our own hand leads to lawlessness and corruption in general," he said.
The Finance Minister said in India, it took 425 days to enforce a contract, thereby placing it at a lowly 173rd position globally on that front.
Mukherjee said the Home Ministry's budgetary allocation was increased by 25 per cent in 2009-10 budget as a result of the increase in the allocation for police and law enforcement agencies.
"This amount could have been spent for development instead," he added.