The new government has unveiled several policy measures that have attracted close public scrutiny. With a clearer mandate than this country has had for a long time, the Modi government is expected to deliver big things.
In order to implement major policy decisions effectively, however, the government must effect precise changes in law – an important step that receives comparatively little public attention.
For example, modernisation of the labour sector has been discussed a great deal, but what shape should this legal reform take? Are we talking about amending legislation or large-scale repeal? What new laws and regulations need to be introduced, if at all, in this area? Particularly in some key areas, the details of the legal changes make all the difference.
Here we present what we think are ten legal changes this country needs.
Consolidate anti-corruption laws
Corruption in public life has hampered India’s economic growth and eroded the public’s faith in governance. A robust anti-corruption law, enforced by an effective anti-corruption institution can deter corruption and restore citizens’ faith in government.
However, the two pending bills, the Prevention of Corruption Amendment Bill and the Prevention of Bribery of Foreign Public Officials Bill, attempting to tackle domestic and foreign bribery respectively, are defective. They have inchoate definitions of the offence, punish instead of encouraging unwilling bribe-givers to report the offence and create conflicts of institutional powers for enforcement agencies such as the Lok Pal.
To rectify these defects, the bills should be withdrawn and re-drafted as one omnibus legislation covering both domestic and foreign bribery, with a common definition of the offence, provisions for immunity to unwilling bribe-givers and a defined set of powers for national and state anti-corruption authorities.
Bolster free speech
Literary works and academic scholarship on religion and history have frequently been the subject of criminal prosecution in India. Several books, such as Shivaji: Hindu King in Islamic India and Great Soul: Mahatma Gandhi and his Struggle with India, have been banned on the grounds that they outrage religious feelings, promote enmity between religious groups or contain assertions prejudicial to national integration.
Revoking the power of the state to ban books is an idealistic solution. Instead, we suggest more implementable measures that bolster free speech and academic scholarship in India. First, banning books must be made more onerous, with the state having to mandatorily disclose the grounds on which the book is sought to be banned and justify such a ban as a necessary and proportionate response to its contents. This will automatically ensure stricter judicial scrutiny.
Second, before any prosecution can be commenced, the sanctioning authority (usually the district magistrate) must satisfy him- or herself that the ingredients of the offence are made out. If the case is frivolous or amounts to an attempt to censor free speech, sanction for prosecution must be withheld.
Manage refugee influx
Despite an ever-increasing number of refugees in India, there is an absence of legislation governing refugees. This means that, with the Foreigners Act now applying to refugees, they are treated like any other foreigner entering India.
As a consequence, India’s national security interests are hampered by a lack of proper legal documentation of all non-citizen residents in India. Moreover, the lack of a law providing certain basic rights to refugees violates India’s international law obligations, specifically the obligation not to return refugees (non-refoulement) to the country where they face persecution.
An immediate solution to this is to amend the Foreigners Act and introduce a basic system of documenting those legitimately seeking refuge in the country. This can be achieved by first defining a refugee in the law and thereafter codifying non-refoulement.
Simultaneously, a system needs to be put in place for determining the status of refugees at the border and issuing identity documents subsequently.
Streamline judicial appointments
The non-appointment of Gopal Subramanium as judge of the Supreme Court despite a positive recommendation from the judicial collegium has brought the issue of appointment of judges back into focus. This is a long-standing issue that has repeatedly fallen short of a systemic solution.
Two key issues must be addressed – constructing a harmonious relation between the judiciary and the executive, and establishing a process that is clearly structured, transparent and facilitates accountability.
The way forward is through a judicial appointments commission. While this has been suggested previously, we believe that a new reworked bill along with a Constitutional amendment should be proposed.
The bill should focus not only on the composition of the commission, but also on the processes to be followed, including clearly legislating for who has the last word. This will ensure a structured relationship between the executive and the judiciary in the appointment of judges, and lead to men and women of high calibre and merit being appointed.
Reduce government litigation
The central government is the largest litigant in the country in terms of initiating cases, and is responsible directly for a significantly large number of cases as a respondent. Ill-conceived appeals by the central government only add to the burden of a slow and inefficient judicial machinery that is barely able to load.
One solution is to fix the demand side of litigation – reduce the number of cases that reach the court. This can be done through a revised national litigation policy, which should be made binding and enforceable against officers, to ensure that filing of appeals by the government is done selectively.
The government should avail itself of alternative dispute resolution methods to resolve disputes with citizens. Additionally, information technology infrastructure should be developed to allow for proper monitoring of the number of pending cases where the government is a litigant.
Repeal obstructionist laws
In a recent report by the Political & Economic Risk Consultancy, a Hong Kong-based consultancy firm, India topped the list of the most over-regulated countries in the world. The complexity of our laws imposes heavy burdens, with their costs often far exceeding the benefits. Laws on the books persist long after the policy need they used to serve has gone.
A two-pronged approach is required to tackle this situation. One, a dedicated body entrusted with the task of identifying laws for repeal – those laws that are not only outdated, but also pose some kind of impediment to economic growth and human development.
Two, introduction of systemic safeguards in lawmaking to ensure this situation does not arise in the future. This can be done through ensuring mandatory review of laws after regular intervals, removing those laws that no longer serve a policy need.
Protect net-neutrality
Net neutrality is the principle that internet service providers and governments should treat all data on the internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment and modes of communication.
Keeping the internet a neutral network is key to the growth of India’s internet economy as it will ensure equality, innovation and competition on the internet. In the absence of rules protecting network neutrality, content providers with deep pockets will be able to afford faster content delivery, leading to a monopolisation of all content on the internet in the hands of a few companies, and willingness to pay will determine the quality of access to the internet.
We believe that the Telecom Regulatory Authority of India should protect net neutrality in India by enacting rules that ensure that ISPs disclose traffic management practices and not discriminate between data packets of any particular content.
Promote renewable energy
India’s renewable energy capacity far exceeds its utilisation. This is largely due to the lack of a strong compliance mechanism in existing central legislation. Certain attractive state policies have driven investments only to those states, irrespective of their energy potential.
Consequently, a third of Indian households are without electricity, and tariffs keep rising for those with access. The first step towards efficient renewable energy usage is legislating on it at the central level, and overriding discretionary and enabling provisions in existing laws. Issues such as grid connection and integration, resource use, financial incentives, and allocation of permits and rights must be regulated.
Existing government schemes that have proved effective should also be enforced through the law, such as registration of renewable energy producers and purchase obligations from these producers. It is important for such a law to set targets, as already set in existing policies, and lay down penalties for non-fulfilment, as well as incentives for compliance.
Harmonise labour laws
A number of extremely contentious issues plague labour law reform, which has been stalled for more than two decades. An incremental approach is necessary, beginning with reform measures that have the greatest acceptability among all stakeholders.
One such measure is the lack of standardisation of terms and benefits across labour laws. The definition of an ‘employee’, for example, varies depending on whether you are dealing with minimum wage law, law relating to the payment of wages, payment of bonus or payment of gratuity. Uniformly adopting a common definition for terms of this nature across all labour laws can be a first step towards an eventual overhaul and simplification of these laws.
Allow crowdfunding of small businesses
The traditional methods of raising finance, such as issuing shares to the public in capital markets, private placements to institutional investors and debt finance are not easily accessible for most small companies and new ventures.
The eligibility requirements for raising finance through an initial public offer are very high. Venture capital investors are usually very selective and not approachable for most small businesses and entrepreneurs.
Given this, crowdfunding, or allowing entrepreneurs to raise capital through an open offer on the internet, may provide a useful alternative for ventures with viable business plans but no reasonable access to traditional modes of financing.
However, given crowdfunding’s vulnerability to frauds and regulatory arbitrage, it should be allowed in a phased manner to gauge its suitability for the Indian markets. Companies in sectors with dynamic entrepreneurial activity could be allowed to raise money through crowdfunding on a pilot basis first, before introducing this on a wider scale.
This piece is based on a report by the New Delhi-based Vidhi Centre for Legal Policy, a legal policy think-tank whose aim is to achieve better governance through better laws. For the complete report, click here: Towards the Rule of Law: 25 Legal Reforms for India.
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In order to implement major policy decisions effectively, however, the government must effect precise changes in law – an important step that receives comparatively little public attention.
For example, modernisation of the labour sector has been discussed a great deal, but what shape should this legal reform take? Are we talking about amending legislation or large-scale repeal? What new laws and regulations need to be introduced, if at all, in this area? Particularly in some key areas, the details of the legal changes make all the difference.
Here we present what we think are ten legal changes this country needs.
Consolidate anti-corruption laws
Corruption in public life has hampered India’s economic growth and eroded the public’s faith in governance. A robust anti-corruption law, enforced by an effective anti-corruption institution can deter corruption and restore citizens’ faith in government.
However, the two pending bills, the Prevention of Corruption Amendment Bill and the Prevention of Bribery of Foreign Public Officials Bill, attempting to tackle domestic and foreign bribery respectively, are defective. They have inchoate definitions of the offence, punish instead of encouraging unwilling bribe-givers to report the offence and create conflicts of institutional powers for enforcement agencies such as the Lok Pal.
To rectify these defects, the bills should be withdrawn and re-drafted as one omnibus legislation covering both domestic and foreign bribery, with a common definition of the offence, provisions for immunity to unwilling bribe-givers and a defined set of powers for national and state anti-corruption authorities.
Bolster free speech
Literary works and academic scholarship on religion and history have frequently been the subject of criminal prosecution in India. Several books, such as Shivaji: Hindu King in Islamic India and Great Soul: Mahatma Gandhi and his Struggle with India, have been banned on the grounds that they outrage religious feelings, promote enmity between religious groups or contain assertions prejudicial to national integration.
Revoking the power of the state to ban books is an idealistic solution. Instead, we suggest more implementable measures that bolster free speech and academic scholarship in India. First, banning books must be made more onerous, with the state having to mandatorily disclose the grounds on which the book is sought to be banned and justify such a ban as a necessary and proportionate response to its contents. This will automatically ensure stricter judicial scrutiny.
Second, before any prosecution can be commenced, the sanctioning authority (usually the district magistrate) must satisfy him- or herself that the ingredients of the offence are made out. If the case is frivolous or amounts to an attempt to censor free speech, sanction for prosecution must be withheld.
Manage refugee influx
Despite an ever-increasing number of refugees in India, there is an absence of legislation governing refugees. This means that, with the Foreigners Act now applying to refugees, they are treated like any other foreigner entering India.
As a consequence, India’s national security interests are hampered by a lack of proper legal documentation of all non-citizen residents in India. Moreover, the lack of a law providing certain basic rights to refugees violates India’s international law obligations, specifically the obligation not to return refugees (non-refoulement) to the country where they face persecution.
An immediate solution to this is to amend the Foreigners Act and introduce a basic system of documenting those legitimately seeking refuge in the country. This can be achieved by first defining a refugee in the law and thereafter codifying non-refoulement.
Simultaneously, a system needs to be put in place for determining the status of refugees at the border and issuing identity documents subsequently.
Streamline judicial appointments
The non-appointment of Gopal Subramanium as judge of the Supreme Court despite a positive recommendation from the judicial collegium has brought the issue of appointment of judges back into focus. This is a long-standing issue that has repeatedly fallen short of a systemic solution.
Two key issues must be addressed – constructing a harmonious relation between the judiciary and the executive, and establishing a process that is clearly structured, transparent and facilitates accountability.
The way forward is through a judicial appointments commission. While this has been suggested previously, we believe that a new reworked bill along with a Constitutional amendment should be proposed.
The bill should focus not only on the composition of the commission, but also on the processes to be followed, including clearly legislating for who has the last word. This will ensure a structured relationship between the executive and the judiciary in the appointment of judges, and lead to men and women of high calibre and merit being appointed.
Reduce government litigation
The central government is the largest litigant in the country in terms of initiating cases, and is responsible directly for a significantly large number of cases as a respondent. Ill-conceived appeals by the central government only add to the burden of a slow and inefficient judicial machinery that is barely able to load.
One solution is to fix the demand side of litigation – reduce the number of cases that reach the court. This can be done through a revised national litigation policy, which should be made binding and enforceable against officers, to ensure that filing of appeals by the government is done selectively.
The government should avail itself of alternative dispute resolution methods to resolve disputes with citizens. Additionally, information technology infrastructure should be developed to allow for proper monitoring of the number of pending cases where the government is a litigant.
Repeal obstructionist laws
In a recent report by the Political & Economic Risk Consultancy, a Hong Kong-based consultancy firm, India topped the list of the most over-regulated countries in the world. The complexity of our laws imposes heavy burdens, with their costs often far exceeding the benefits. Laws on the books persist long after the policy need they used to serve has gone.
A two-pronged approach is required to tackle this situation. One, a dedicated body entrusted with the task of identifying laws for repeal – those laws that are not only outdated, but also pose some kind of impediment to economic growth and human development.
Two, introduction of systemic safeguards in lawmaking to ensure this situation does not arise in the future. This can be done through ensuring mandatory review of laws after regular intervals, removing those laws that no longer serve a policy need.
Protect net-neutrality
Net neutrality is the principle that internet service providers and governments should treat all data on the internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment and modes of communication.
Keeping the internet a neutral network is key to the growth of India’s internet economy as it will ensure equality, innovation and competition on the internet. In the absence of rules protecting network neutrality, content providers with deep pockets will be able to afford faster content delivery, leading to a monopolisation of all content on the internet in the hands of a few companies, and willingness to pay will determine the quality of access to the internet.
We believe that the Telecom Regulatory Authority of India should protect net neutrality in India by enacting rules that ensure that ISPs disclose traffic management practices and not discriminate between data packets of any particular content.
Promote renewable energy
India’s renewable energy capacity far exceeds its utilisation. This is largely due to the lack of a strong compliance mechanism in existing central legislation. Certain attractive state policies have driven investments only to those states, irrespective of their energy potential.
Consequently, a third of Indian households are without electricity, and tariffs keep rising for those with access. The first step towards efficient renewable energy usage is legislating on it at the central level, and overriding discretionary and enabling provisions in existing laws. Issues such as grid connection and integration, resource use, financial incentives, and allocation of permits and rights must be regulated.
Existing government schemes that have proved effective should also be enforced through the law, such as registration of renewable energy producers and purchase obligations from these producers. It is important for such a law to set targets, as already set in existing policies, and lay down penalties for non-fulfilment, as well as incentives for compliance.
Harmonise labour laws
A number of extremely contentious issues plague labour law reform, which has been stalled for more than two decades. An incremental approach is necessary, beginning with reform measures that have the greatest acceptability among all stakeholders.
One such measure is the lack of standardisation of terms and benefits across labour laws. The definition of an ‘employee’, for example, varies depending on whether you are dealing with minimum wage law, law relating to the payment of wages, payment of bonus or payment of gratuity. Uniformly adopting a common definition for terms of this nature across all labour laws can be a first step towards an eventual overhaul and simplification of these laws.
Allow crowdfunding of small businesses
The traditional methods of raising finance, such as issuing shares to the public in capital markets, private placements to institutional investors and debt finance are not easily accessible for most small companies and new ventures.
The eligibility requirements for raising finance through an initial public offer are very high. Venture capital investors are usually very selective and not approachable for most small businesses and entrepreneurs.
Given this, crowdfunding, or allowing entrepreneurs to raise capital through an open offer on the internet, may provide a useful alternative for ventures with viable business plans but no reasonable access to traditional modes of financing.
However, given crowdfunding’s vulnerability to frauds and regulatory arbitrage, it should be allowed in a phased manner to gauge its suitability for the Indian markets. Companies in sectors with dynamic entrepreneurial activity could be allowed to raise money through crowdfunding on a pilot basis first, before introducing this on a wider scale.
This piece is based on a report by the New Delhi-based Vidhi Centre for Legal Policy, a legal policy think-tank whose aim is to achieve better governance through better laws. For the complete report, click here: Towards the Rule of Law: 25 Legal Reforms for India.
