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Court stay orders have adversely affected economy: Economic Survey 2018

Judicial orders have led to 60% cost overruns for various government projects, the survey says

business Updated: Jan 30, 2018 22:47 IST
Ashok Bagriya
Economic Survey which was tabled in Parliament during the first day of Budget Session of Parliament, in New Delhi on Monday.
Economic Survey which was tabled in Parliament during the first day of Budget Session of Parliament, in New Delhi on Monday.(PTI Photo)

Interim stay orders by courts appear to be taking a toll on the country’s economy and have resulted in 60% cost overruns for various government projects, this year’s Economic Survey of India revealed on Monday.

According to data, the ministries of power, road and railways were the worst hit by these judicial orders.

The Economic Survey of India 2018 stated: “It is difficult to estimate the costs of (judicial) pendency and delays” but a study “of government projects in six infrastructure ministries that are currently stayed by court injunctions, as well as the average duration of their stays” showed that the economic growth was hampered as projects worth Rs 52,000 crore were hit by the court orders.

The figure of Rs 52,000 crore was only illustrative and “does not include other central government projects or the multitude of state level projects that are similarly stalled by court injunctions, nor past projects that suffered delays due to injunctions but were subsequently allowed to resume operations,” the survey stated.

Quoting the iconic dialogue of “tarikh-par- tarikh, tarikh-par-tarikh” (“dates followed by dates followed by dates”) by Sunny Deol in a Bollywood movie, the economic survey articulated the frustrations “of delayed and-hence-denied justice”.

The survey also estimated Rs 19,000 crore as the overall impact of pendency at Appellate Tribunals, high courts and the Supreme Court levels for corporate India in terms of legal expenses.

In the chapter titled ‘Ease of Doing Business’ Next Frontier: Timely Justice’, the survey stated that pendency, delays and backlogs in the appellate and judicial arenas, were perhaps leading to lower business sentiments in the country.

“Rising pendency also results from the injunction of cases by courts. In the case of Intellectual Property Rights (IPR) cases, injunctions have led to about 60% of cases being stayed, whose average pendency is 4.3 years” the survey says.

Suggesting a way out of this quagmire, the economic survey stated: “Pendency, delays and injunctions are overburdening courts and severely impacting the progress of cases, especially economic cases. The Government and the Courts need to both work together for large- scale reforms and incremental improvements to combat a problem that is exacting a large toll from the economy. ”

The survey even highlights the need to expand judicial capacity in the lower courts and reducing the existing burden on the HCs and the Supreme Court.