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  • [Burning Issue] Fiscal Council in India: Certain solution in uncertain times

    The impact of COVID-19 on the economy is devastating and the government is forced to opt to borrow for spending more in order to support vulnerable households and engineer economic recovery due to the after-effects of COVID-19 pandemic on the economy.

    The BI highlights the need for bipartisan, independent Fiscal Council to report and analyse FRBM discrepancies and inaccurate fiscal projections.

    COVID Times: Fiscal situation and its unpredictability

    • The fiscal deficit of the Centre in 2019-20 as estimated by the Controller General of Accounts (CGA) was 4.6%, 0.8 percentage point higher than the revised estimate.
    • For 2020-21, even without any additional fiscal stimulus, the deficit is estimated at about 7% of GDP as against 3.5% estimated in the Budget due to a sharp decline in revenues.
    • The consolidated deficit of the Union and States could be as high as 12% of GDP and the overall debt could go up to 85%.

    What is the Fiscal Council?

    • A Fiscal Council is an independent fiscal institution (IFI) with a mandate to promote stable and sustainable public finances.
    • They aim to provide nonpartisan oversight of fiscal performance and/or advice and guidance — from either a positive or normative perspective — on key aspects of fiscal policy.
    • These institutions assist in calibrating sustainable fiscal policy by making an objective and scientific analysis.

    Important tasks of these IFIs: 

    1. Independent analysis, review and monitoring and evaluating of government’s fiscal policies and programmes
    2. Developing or reviewing macroeconomic and/or budgetary projections
    3. Costing of budget and policy proposals and programmes
    4. Presenting policymakers with alternative policy options

    Voices for a Fiscal Council

    • The 13th Finance Commission recommended that a committee be appointed by the Ministry of Finance which should eventually transform itself into a Fiscal Council.
    • The FC expected it to conduct an annual independent public review of FRBM compliance, including a review of the fiscal impact of policy decisions.
    • The FRBM Review Committee too made a similar recommendation underlining the need for an independent review by the Finance Ministry appointing the Council.

    Tap to read more about the FRBM Act:

    Explained: Fiscal Responsibility and Budget Management (FRBM) Act

    Why need a fiscal council?

    (1) Burgeoning deficits

    • For the current year, even without any additional fiscal stimulus, the deficit is estimated at about 7% of GDP as against 3.5% estimated in the Budget due to a sharp decline in revenues.
    • The consolidated deficit of the Union and States could be as high as 12% of GDP and the overall debt could go up to 85%.
    • Thus, it is necessary that the government must return to a credible fiscal consolidation path once the crisis gets over.

    (2) Transparency issues

    • Besides large deficits and debt, there are questions of comprehensiveness, transparency and accountability in the Budgets.
    • The practice of repeated postponement of targets, timely non-settlement of bill payments and off Budget financing to show lower deficits has been common.
    • The report of the CAG of India in 2018 has highlighted various advances done to keep the liabilities hidden.

    (3) Fiscal discipline

    • Many economists have faulted the government’s fiscal stance, arguing that this is no time for restraint; the government should spend more to stimulate the economy by borrowing as may be necessary.
    • In 2017, the N.K. Singh committee on the review of fiscal rules set up by the finance ministry suggested the creation of an independent fiscal council that would provide forecasts and advise the government on whether conditions exist for deviation from the mandated fiscal rules.
    • Also in 2018, the D.K. Srivastava committee on fiscal statistics established by the National Statistical Commission (NSC) also suggested the establishment of a fiscal council.

    Fiscal Council can be a game-changer. How?

    • Watchdog of public finance: An unbiased fiscal scrutiny will help raise the level of debate and brings in greater transparency and accountability.
    • Highlights populist measures: Accurate costing of various policies and programmes can help to promote transparency over the political cycle to discourage populist shifts in fiscal policy and improve accountability.
    • Public awareness: Scientific estimates of the cost of programmes and assessment of forecasts could help in raising public awareness about their fiscal implications and make people understand the budget.
    • Rule of law maintenance: The Council will work as a conscience keeper in monitoring rule-based policies, and in raising awareness and the level of debate within and outside Parliament.

    Challenges meddling between

    1) Lack of Political Will

    • Back in 2003 when FRBM was enshrined into law, it was thought of as the magic cure for fiscal ills.
    • The FRBM enjoins the government to conform to pre-set fiscal targets, and in the event of failure to do so, to explain the reasons for deviation
    • The government is also required to submit to Parliament a ‘Fiscal Policy Strategy Statement’ (FPSS) to demonstrate the credibility of its fiscal stance
    • However, there is a lack of in-depth discussion in Parliament on fiscal stance and the submission of the FPSS often passes off without even much notice.

    2) Adding up more to the accountability of the Govt.

    • Fiscal council will give macroeconomic forecasts which the Finance Ministry is expected to use for the budget, and if the Ministry decides to differ from those estimates, it is required to explain why it has differed.
    • Besides, forcing the Finance Ministry to use someone else’s estimates will dilute its accountability.
    • If the estimates go wrong, the Finance Ministry will simply shift the blame to the fiscal council.

    3) Fiscal Bias

    • Governments that are unsure of being re-elected may ignore the long-term consequences of fiscal deficits and use generous fiscal policy to increase their chances of re-election.
    • This may be possible because voters tend to see the short term benefits they can gain from a reduction in taxes and an increase in public spending but are not always fully aware of the possible long-term costs of this.
    • This may explain why unsustainable deficits are not systematically punished by voters

    4) Duplication of Work

    • As of now, both the Central Statistics Office (CSO) and RBI give forecasts of growth and other macroeconomic variables, questions will be raised about the need for Fiscal Council’s projections
    • Another argument made in support of a fiscal council is that it will act as watchdog & prevent the government from gaming the fiscal rules through creative accounting.
    • However, there is already an institutional mechanism in form of CAG to do the job of auditing & fiscal watchdog of government spending.

    Way forward

    • When the markets fail, governments have to intervene. Whenever governments seem obstructed, it is here that we need systems and institutions to ensure checks and balances.
    • In that respect, a Fiscal Council is an important institution needed to complement the rule-based fiscal policy.

    Alternatives to the situation

    • We can expect the CAG to scrutinize the budget after it is presented to Parliament for its fiscal stance and the integrity of the numbers, and give out a public report.
    • The CAG’s office will provide the secretarial and logistic support to the committee from within its resources.

    Global examples

    • The Office for Budget Responsibility (OBR) is a non-departmental public body funded by the UK Treasury, that the UK government established to provide independent economic forecasts and independent analysis of the public finances.
    • We can have a similar official watchdog at our behest!

    Conclusion

    • Of course, a fiscal council is not a ‘silver bullet’; if there is no political will, the institution would be less effective, and if there is political will, there is no need for such an institution.
    • That is also true of the FRBM Act. While we cannot state that the FRBM Act has been an unqualified success, it has also not been an abject failure either.

     

     

    References

    https://www.thehindu.com/opinion/lead/india-does-need-a-fiscal-council/article32432565.ece

    https://www.thehindu.com/opinion/lead/do-we-need-a-fiscal-council/article32046204.ece

    https://en.wikipedia.org/wiki/Fiscal_council

  • Renati Chola Era Inscription

    A rare inscription dating back to the Renati Chola era has been unearthed in a remote village of Kadapa district of Andhra Pradesh.

    Try this PYQ:

    Q.In the context of the history of India, consider the following pairs:

    Term: Description

    1. Eripatti: Land revenue from which was set apart for the maintenance of the village tank
    2. Taniyurs: Villages donated to a single Brahmin or a group of Brahmins
    3. Ghatikas: Colleges generally attached to the temples

    Which of the pairs given above is/are correctly matched?

    (a) 1 and 2

    (b) 3 only

    (c) 2 and 3

    (d) 1 and 3

    Who are the Renati Cholas?

    • The Telugu Cholas of Renadu (also called as Renati Cholas) ruled over Renadu region, the present-day Kadapa district.
    • They were originally independent, later forced to the suzerainty of the Eastern Chalukyas.
    • They had the unique honour of using the Telugu language in their inscriptions belonging to the 6th and 8th centuries.
    • The earliest of this family was Nandivarman (500 AD) who claimed descent from the family of Karikala and the Kasyapa gotra.
    • He had three sons Simhavishnu, Sundarananda and Dhananjaya, all of whom were ruling different territories simultaneously.
    • The family seems to have had its origin in Erigal in the Tunmkur district, situated in the border between Pallava and Kadamba regions.

    About the inscription

    • The inscription so found was engraved on a dolomite slab and shale.
    • The inscription was written in archaic Telugu which is readable in 25 lines — the first side with eleven lines and the remaining on the other side.
    • It was assigned to the 8th Century A.D. when the region was under the rule of Chola Maharaja of Renadu.
    • The inscription seems to throw light on the record of a gift of six Marttus (a measuring unit) of land gifted to a person Sidyamayu, one of the Brahmins serving the temple at Pidukula village.
    • It says the people who safeguard this inscription for future generations will acquire the status of conducting Aswamedha Yajna and those destroying it will incur sin equivalent to causing death in Varanasi.

  • Exercise Kavkaz 2020

    India has turned down Russia’s invitation to participate in the multilateral defence exercise Kavkaz 2020.

    Go through the list for once. UPSC may ask a match the pair type question asking exercise name and countries involved.

    https://www.civilsdaily.com/prelims-spotlight-defence-exercises/

    Exercise Kavkaz 2020

    • The Kavkaz 2020 is also referred to as Caucasus-2020.
    • The exercise is aimed at assessing the ability of the armed forces to ensure military security in Russia’s southwest, where serious terrorist threats persist and preparing for the strategic command-staff drills.
    • The main training grounds that will be involved are located in the Southern Military District.
    • The invitation for participation has been extended to at least 18 countries including China, Iran, Pakistan and Turkey apart from other Central Asian Republics part of the SCO.

    Why didn’t India participate?

    • While it is learned that China has confirmed its participation, Pakistan is also likely to send its troops for the exercise.
    • In the response communicated to Russia, New Delhi cited Covid-19 as the official reason to skip ‘Exercise Kavkaz 2020’.
    • The move comes in the backdrop of a border standoff with China in eastern Ladakh.

    Earlier instances

    • Exercise Tsentr last year had the participation of India, Pakistan and all Shanghai Cooperation Organisation (SCO) member-nations.
    • India had participated in SCO peace mission exercise in 2018, and in 2019, for the first time, was involved in a strategic command and staff exercise as part of Exercise Tsentr.

  • Despite the messaging, it is still advantage China

    The article examines whether India has been proving a favourable alternative to China or not.

    Is India becoming alternate supply source and investment destination?

    • Despite media reports and strong messaging from Washington, fewer U.S. companies than predicted might quit China.
    • Companies focused on the Chinese domestic market rather than as a base for exports will likely remain, at least for now.
    • Those that do leave may not choose India as a relocation destination.
    • Many U.S. companies with experience working with China are not convinced that India has China’s established industrial base and expertise.
    • They also see other Asian countries as more competitive.

    India’s strengths

    • Democracy: India’s identity as a democratic “un-China” is one of its strongest selling points.
    • Strong IPR: There is no threat of stealing of intellectual property rights.
    • No coercive tactics: Foreign companies in India are not subject to coercive tactics as in China.
    • Institutions: India’s open and vibrant press, an independent judiciary, and other advantages of democratic governance also provide a contrast to China.
    • Domestic market:India’s well-off domestic market also attracts foreign investors.

    Why China is a favoured destination

    • China offers many advantages, such as a manufacturing infrastructure and skill level that allows innovations to move quickly from prototype to product.
    • China’s specialised industrial zones are massive, collocating companies, factories, logistics, and even research and universities.

    Way forward

    1) Focus on the States

    • India can start by focusing development in those Indian States that have already demonstrated the ability to produce and export in key sectors.
    • Foreign capital could also greatly increase infrastructure funds beyond government spending alone.
    • India might also usefully build up new industrial centres with an eye to geography. [for instance-linking the southeast of the country to supply chains in Southeast Asia]

    2) Focus on the policy framework

    • India should take two great steps-
    • 1) Reduce the number of investments needing approval by the Centre.
    • 2)To increase intra-Ministry coordination on foreign direct investment policies.
    • The same coordination could be extended to the appointment of a high-level official or body in the Prime Minister’s Office.
    • This will ensure that all proposed economic policy changes are consistent with the goal of attracting foreign investment.

    Conclusion

    A policy framework that is transparent, predictable, and provides increased consultations with existing and potential foreign company stakeholders before introducing new Indian economic policies, will play a crucial role in determining India’s foreign investment outlook.

  • Implications of World Bank halting ‘Doing Business’ report for India

    India’s ranking in the World Bank’s ‘Ease of Doing Business’ index has improved spectacularly. However, the World Bank recently halted its publication and announced decision to review and assess data changes for last five years.

    Background

    • Citing irregularities of data for a few countries, the World Bank halted its annual publication ‘Doing Business’ report.
    • It will conduct a systematic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business reports.

    Why India should be concerned

    • Through improved ranking India sought to attract investments to achieve the targets set for ‘Make in India’.
    • India’s success in boosting its ease of doing business ranking is spectacular, to 63rd rank in 2019, up from the 142nd position in 2014.
    • Policymakers celebrated it to signal India’s commitment to “minimum government and maximum governance”.
    • The World Bank decision to audit the ‘Doing Business’ report for the last five years may soon cause discomfort by shining a spotlight on the sharp rise in India’s ranking.
    • Study at the Center for Global Development found that the improvement in India’s ranking was almost entirely due to methodological changes.
    • During the same period, however, Chile’s global rank went down sharply, from 34th position in 2014 to 67th in 2017.
    • The contrasting experience of Chile and India casts doubts on not just the country-level data but also the changes in underlying methodologies.

    Does ease of doing business have predictive power?

    • While India’s rank drastically improved, it has meant nothing on the ground.
    • The share of the manufacturing sector has stagnated at around 16-17% of GDP, and 3.5 million jobs were lost between 2011-12 and 2017-18.
    • Annual GDP growth rate in manufacturing fell from 13.1% in 2015-16 to zero in 2019-20, as per the National Accounts Statistics.
    • India’s import dependence on China has shot up.
    • In case of Russia, ease of doing business rank jumped from 120 in 2012 to 20, but without becoming a magnet for investment inflows.
    • China, on the contrary, attracted one of the highest capital inflows but its ease of doing business ranking was low and hovered between 78 and 96 for the years between 2006 and 2017.

    Other flaws in the Index

    • The Indicators used for the index are de jure (as per the statute), not de facto (in reality).
    • The data for computing the index are obtained from larger enterprises in two cities, Mumbai and Delhi, by lawyers, accountants and brokers — not from entrepreneurs.
    • The World Bank’s own internal watchdog, the Independent Evaluation Group, in its 2013 report, has widely questioned the reliability and objectivity of the index.
    • The World Bank conducts a global enterprise survey collecting information from companies.
    • There is no correlation between the rankings obtained from ease of doing business and the enterprise surveys.

    Lack of theoretical basis: Major flaw

    • There is little in any major strand of economic thought which suggests that minimally regulated markets for labour and capital produce superior outcomes in terms of output and employment.
    • Economic history shows rich variations in performance across countries and policy regimes, defying simplistic generalisations.
    • Such simplistic basis is used under a seemingly scientific garb of the quantitative index to the disadvantage of workers.
    • To meet the ease of doing business targets, safety standards of factories are compromised.
    • For instance, in 2016, the Maharashtra government abolished the annual mandatory inspection of steam boilers under the Boilers Act of 1923 and the Indian Boilers Regulation 1950.
    •  However, no factory has complied with self-certification or submitted the third party certification.

    Consider the question “Examine the issues with the World Bank’s ‘Ease of Doing Business Index’?  What are its implications for India?”

    Conclusion

    It is time the World Bank rethinks its institutional investment in producing the ‘Doing Business’ report. India should do some soul searching as to why the much trumpeted rise in global ranking has failed miserably on the ground.

  • UN’s guidelines on Access to Social Justice for People with Disabilities

    The United Nations has released it’s first-ever guidelines on access to social justice for people with disabilities to make it easier for them to access justice systems around the world.

    Note: These guidelines can be used in mains answer while substantiating their rights.

    Defining a person with a disability

    • The UN Convention on the Rights of Persons with Disabilities was adopted in 2007 as the first major instrument of human rights in the 21st century.
    • It defines persons with disabilities as those “who have long-term physical, mental, intellectual or sensory impairments which in interaction with various barriers may hinder their full and effective participation in society on an equal basis with others”.

    Highlights of the Guidelines

    The guidelines outline a set of 10 principles and detail the steps for implementation. The 10 principles are:

    • Principle 1: All persons with disabilities have the legal capacity and, therefore, no one shall be denied access to justice on the basis of disability.
    • Principle 2: Facilities and services must be universally accessible to ensure equal access to justice without discrimination of persons with disabilities.
    • Principle 3: PWDS including children with disabilities, have the right to appropriate procedural accommodations.
    • Principle 4: PWDS have the right to access legal notices and information in a timely and accessible manner on an equal basis with others.
    • Principle 5: PWDS are entitled to all substantive and procedural safeguards recognized in international law on an equal basis with others, and States must provide the necessary accommodations to guarantee due process.
    • Principle 6: PWDS have the right to free or affordable legal assistance.
    • Principle 7: PWDS have the right to participate in the administration of justice on an equal basis with others.
    • Principle 8: PWDS have the rights to report complaints and initiate legal proceedings concerning human rights violations and crimes, have their complaints investigated and be afforded effective remedies.
    • Principle 9: Effective and robust monitoring mechanisms play a critical role in supporting access to justice for persons with disabilities.
    • Principle 10: All those working in the justice system must be provided with awareness-raising and training programmes addressing the rights of persons with disabilities, in particular in the context of access to justice.

    Significance for India

    • As per statistics maintained by the UN, in India 2.4 per cent of males are disabled and two per cent of females from all age groups are disabled.
    • Disabilities include psychological impairment, intellectual impairment, speaking, multiple impairments, hearing, seeing among others.
    • In comparison, the disability prevalence in the US is 12.9 per cent among females and 12.7 per cent among males.
    • Disability prevalence in the UK is at 22.7 per cent among females and 18.7 per cent among males.

  • Person in news: Noor Inayat Khan

    World War II spy Noor Inayat Khan is now the first woman of Indian origin to be commemorated by the distinct blue London plaque.

    Try this PYQ:

    Q.A recent movie titled “The Man Who Knew Infinity” is based on the biography of-

    (a) S. Ramanujan
    (b) S. Chandrasekhar
    (c) S. N. Bose
    (d) C. V. Raman

    Noor Inayat Khan

    • A descendant of Tipu Sultan, Noor Inayat Khan became a secret agent during the Second World War.
    • She was the first woman radio operator to be infiltrated into occupied France in 1943 and worked under the code name ‘Madeleine’.
    • Renowned for her service in the Special Operations Executive, an independent British secret service set up by Winston Churchill in 1940.
    • Noor was Britain’s first Indian Muslim war heroine in Europe and the first female radio operator sent into Nazi-occupied France.
    • She was killed at the Dachau concentration camp in 1944 and was posthumously awarded the George Cross in 1949.

    What are Blue Plaques?

    • The idea of placing commemorative plaques on historically significant buildings was first mooted in 1863.
    • The idea was to honour important people and organisations that have lived or worked in London buildings.
    • Currently, the blue plaque scheme is being run by the charity organisation, English Heritage that takes care of historic sites and buildings in England.
    • While Khan is the first woman of Indian origin to be honoured with a blue plaque, it has been erected on houses and venues associated with several Indian men including Mahatma Gandhi, Raja Ram Mohun Roy, B R Ambedkar, Sardar Patel and Swami Vivekananda among others.

  • Changing India’s health delivery landscape through NDHM

    The National Digital Health Mission promises to transform the Indian healthcare system with the aid of technology. The article highlights the key aspects of the mission.

    Building integrated digital health infrastructure through NDHM

    • NDHM is based on the principles of health for all, inclusivity, accessibility, affordability, education, empowerment, wellness, portability, privacy and security by design.
    • NDHM will build the backbone necessary to create an integrated digital health infrastructure.
    • With its key building blocks HealthID, DigiDoctor, Health Facility Registry, Personal Health Records, Telemedicine, and e-Pharmacy, the mission will bring together disparate stakeholders and radically strengthen and, thus change India’s healthcare delivery landscape.
    • NDHM is also a purposeful step towards the achievement of the United Nations’ Sustainable Development Goal of Universal Health Coverage.

    Importance of digital intervention in health service

    • Digital interventions significantly enhance the outcomes of every health service delivery programme.
    • Importance of digital intervention is demonstrated in the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana scheme.
    • Under PM-JAY, 1.2 crore cashless secondary and tertiary care treatments have been provided using an indigenously developed state-of-the-art IT platform.
    • The Arogya Setu mobile app deploys ICT innovations for contract tracing.

    Principal highlight of NDHM

    1) Voluntary in nature

    • HealthID is entirely voluntary for citizens.
    • Its absence will not mean denial of healthcare to a citizen.
    • They can choose to generate their Health Account or ID using their Aadhaar card or digitally authenticable mobile number and by using their basic address-related details and email ID.
    • The use of Aadhaar, therefore, is not mandatory.

    2) Data sharing based on consent

    • Providing access to and sharing of personal health records is a prerogative of the HealthID holder.
    • The consent of the health data owner is required to access this information or a part of it.The consent can be withdrawn anytime.
    • The personal health record will enable citizens to store and access their health data, provide them with more comprehensive information and empower them with control over their private health records.

    3) Compliance with laws and fundamental rights

    • NDHM has been built within a universe of fundamental rights and legislation such as the Aadhaar Act and the IT Act 2008 as well as the Personal Data Protection Bill 2019.
    • This project is also informed by the entire gamut of Supreme Court judgments and core democratic principles of cooperative federalism.
    • The Mission gets its strategic and technical foundation from the National Digital Health Blueprint, the architectural framework of which keeps the overall vision of NHP 2017 at its core and ensures security and privacy by design.

    4) Reaching out to the unconnected population

    •  NHDM is a digital mission led by technology powered by the internet.
    • So, to reach out to and empower the large number of “unconnected” masses specialised systems are being built and off-line modules that will be designed to reach out to the “unconnected”.

    5) Partnership with all key stakeholders

    • The design of NDHM has been built on the principle of partnership with all key stakeholders — doctors, health service providers, technology solution providers and above all citizens.
    • Without their belief, trust, adoption, and stewardship, this mission will not achieve its desired result.

    Consider the question “Examine the key aspects of the National Digital Heath Mission and how it could help transform the Indian healthcare landscape?”

    Conclusion

    NDHM is a mission whose time has come because health is the first step towards self-reliance and only a healthy nation can become Atma Nirbhar.

  • Issue of GST compensation to states

    The article analyses the issue of GST compensation to states under GST regime for five years and how this has turned to be contentious issues after the economic disruption caused by Covid-19.

    The basis for compensation

    • Under Goods and Services Tax (GST) regime the Centre would make good the loss in the first five years if States faced revenue deficits after the GST’s introduction.
    • States sacrificed their constitutionally granted powers of taxation in the national interest.

    GST compensation cess

    • To pay the compensation to states, GST compensation cess was introduced.
    • When the GST compensation cess exceeded the amount that had to be paid to States, the Central government absorbed the surplus.
    •  Now, the economy has slowed down dramatically and the resources raised are insufficient.
    • The Centre is raising questions about whether it is legally accountable to pay compensation.
    • The constitutional framework that ushered in the GST does not provide an escape clause for ‘Acts of God’.

    Way forward

    • As stated by the Secretary of the GST Council in the tenth meeting, the central government could raise resources by other means for compensation and this could then be recouped by continuing the cess beyond five years.
    • Monetary measures are the monopoly of the central government.
    • Even borrowing is more efficient and less expensive if it is undertaken by the Central government.
    • As equal representatives of the citizens State governments expected the Centre to demonstrate empathy and provide them relief through the Consolidated Fund of India.

    Conclusion

    Central government should consider the legal provision in the GST regime and act in the spirit of cooperative federalism.

  • [Burning Issue] Free Speech Vs. Contempt of Court

    Power of judiciary lies neither in deciding cases, nor in imposing sentences, nor in giving punishment for its contempt, but in the trust, confidence and faith of the general public. Criticism is important for it helps to give us a new perspective and opens our eyes to things we may have overlooked or never considered.

    But where do we draw the line between Contempt and criticism? Contempt of court is back in the news. This follows the initiation and conviction of contempt proceedings against a veteran advocate-activist by the Supreme Court of India, on its own motion.

    What is Contempt of Court?

    • Contempt of court, often referred to simply as “contempt”, is the offence of being disobedient to or disrespectful toward a court of law and its officers in the form of behaviour that opposes or defies the authority, justice and dignity of the court.

    History behind ‘Contempt’

    • The concept of contempt of court is several centuries old.
    • In England, it is a common law principle that seeks to protect the judicial power of the king, initially exercised by him, and later by a panel of judges who acted in his name.
    • Violation of the judges’ orders was considered an affront to the king himself.
    • Over time, any kind of disobedience to judges, or obstruction of the implementation of their directives, or comments and actions that showed disrespect towards them came to be punishable.

    Entry into our legal books

    • There were pre-Independence laws of contempt in India. Besides the early High Courts, the courts of some princely states also had such laws.
    • When the Constitution was adopted, contempt of court was made one of the restrictions on freedom of speech and expression.
    • Separately, Article 129 of the Constitution conferred on the Supreme Court the power to punish for its contempt.
    • Article 215 conferred a corresponding power on the High Courts.
    • The Contempt of Courts Act, 1971, gives statutory backing to the idea.

    What are the types of Contempt?

    In India contempt of court is of two types under the Contempt of Courts Act of 1971:

    • Civil contempt: Under Section 2(b), civil contempt has been defined as willful disobedience to any judgment, decree, direction, order, writ or another process of a court or willful breach of an undertaking given to a court.
    • Criminal contempt: Under Section 2(c), criminal contempt has been defined as the publication (whether by words, spoken or written, or by signs, or by visible representation, or otherwise) of any matter or the doing of any other act whatsoever which:
      1. Scandalizes or tends to scandalize, or lowers or tends to lower the authority of, any court, or
      2. Prejudices, or interferes or tends to interfere with the due course of any judicial proceeding, or
      3. Interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner.

    WAIT, What accounts for the scandalizing of the Judiciary?

    • Making allegations against the judiciary or individual judges, attributing motives to judgments and judicial functioning and any scurrilous attack on the conduct of judges are normally considered matters that scandalise the judiciary.

    What is not contempt of court?

    • Fair and accurate reporting of judicial proceedings will not amount to contempt of court.
    • Nor is any fair criticism on the merits of a judicial order after a case is heard and disposed of.
    • The Contempt Act was amended in 2006 to introduce truth as a valid defence if it was in the public interest and was invoked in a bonafide.

    Since we are done with what is not contempt, let us look at what constitutes contempt.

    Necessary ingredients for Contempt of Court in India

    1) Interference with Administration of Justice

    • In Brahma Prakash Sharma v State of UP, the Supreme Court had held that in order to constitute the offence of Contempt of Court, it was not necessary to specifically prove that an actual interference with the administration of justice has been committed.
    • The Court held that it was enough if a defamatory statement is likely or in any way tends to interfere with the proper administration of justice.

    2) Scandalizing the Court 

    • In the case of PN Dua v Shiv Shankar and others, the Supreme Court held that mere criticism of the Court does not amount to contempt of Court.
    • The Court observed that in a free marketplace of ideas, criticisms about the judicial system or Judges should be welcomed, so long as such criticisms do not hamper the administration of justice.
    • In the case of Baradanath Mishra v, the Registrar of Orissa High Court the court held that a common form of such contempt is the vilification (personal abuse) of the judges.

    3) Interference with due course of Justice

    • In Pritam Lal v. High Court of M.P the Supreme Court held that to preserve the proceedings of the Courts from interference and to keep the streams of justice pure, it becomes the duty of the Court, to punish the contemner in order to preserve its dignity.
    • No one can claim immunity from the law of contempt if his act or conduct in relation to Court interferes or obstructs the due course of justice.

    Issues with the Contempt

    Contempt is not just associated with judiciary, we have heard or read about journalist or cartoonist arrested for contempt of parliament. Now in general, Use of contempt power has the following issues:

    1) Curb on Civil Liberties

    • A law for criminal contempt gets in conflict with India’s democratic system which recognises freedom of speech and expression as a fundamental right.
    • In this manner, the judiciary draws resemblance with the executive, in using laws for a chilling effect on freedom of speech.
    • Former Justice of Supreme Court, V.R. Krishna Iyer, famously termed the law of contempt as “having a vague and wandering jurisdiction, with uncertain boundaries; contempt law, regardless of the public good, may unwittingly trample upon civil liberties”.

    2) Ambiguity of the concept

    • The definition of criminal contempt in India is extremely wide and can be easily invoked.
    • Also, suo motu powers of the Court to initiate such proceedings only serve to complicate matters.
    • Further, the Contempt of Courts Act was amended in 2006, to add truth and good faith as valid defences for contempt, but they are seldom entertained by the judiciary.

    3) Fair criticism is justified

    • In S.Mugolkar v. Unknown (1978), the Supreme Court held that the judiciary cannot be immune from fair criticism.
    • It held that contempt action is to be used only when an obvious misstatement with malicious intent seeks to bring down public confidence in the courts or seeks to influence the courts.

    4) Obsolete ideology

    • The punishment for contempt could procure submission but not respect for the judicial institution.
    • Already, contempt has practically become obsolete in foreign democracies, with jurisdictions recognising that it is an archaic law.
    • For example, England abolished the offence of “scandalizing the court” in 2013. Canada ties its test for contempt to real, substantial and immediate dangers to the administration. American courts also no longer use the law of contempt in response to comments on judges or legal matters.

     

    Need for the Contempt provisions: Arguments in favour

    https://d18x2uyjeekruj.cloudfront.net/wp-content/uploads/2020/08/cont.jpg

    1) Upholding the constitution

    • The powers of contempt of the Supreme Court and High Courts are independent of the Act 1971, that is, drawn from the Constitution.
    • So to delete the provision relating to ‘criminal contempt’ particularly ‘scandalizing of courts’ will have no impact on the power of the Superior Courts to punish for contempt in view of their inherent constitutional powers, as these powers are independent of statutory provisions.

    2) Ensuring Safeguards for Judiciary

    • The Judiciary is the guardian of rule of law in India and it needs to be made sure that it is protected with all kinds of problems that do or might hamper the fluent administration of justice.
    • The provision of powers to punish for contempt is significant for ensuring such respect of the Judiciary. Such kind of power is necessary to prevent interference with the course of justice and the authority of the court.

    3) Protecting public faith in Judiciary

    • Amendment in the definition of contempt may reduce the overall impact of the law and lessen the respect that people have for courts and their authority and functioning.
    • Also by abolishing the offence in India would leave a legislative gap.

    4) Impact on Subordinate Courts

    • The Constitution allows superior courts to punish for their contempt. The Contempt of Court Act additionally allows the High Court to punish for contempt of subordinate courts.
    • Thus, if the definition of contempt is removed, subordinate courts will suffer as there will be no remedy to address cases of their contempt.

    5) Fair criticism is not contempt

    • The 1971 Act contains adequate safeguards to exclude instances which may not amount to criminal contempt” as defined under Section 2(c) of the Act 1971.
    • It means that not all cases of contempt are considered.

    “Let me say at once that we will never use this jurisdiction as a means to uphold our own dignity. That must rest on surer foundations. Nor will we use it to suppress those who speak against us. We do not fear criticism, nor do we resent it. For there is something far more important at stake. It is no less than freedom of speech itself.”

    – Lord Denning

    Way forward

    • The Law Commission has held that there is a need to retain the provision regarding the contempt of courts. However, it also recommended the definition of contempt should be restricted to civil contempt, i.e., willful disobedience of judgments of the court.
    • The contempt of court should not be allowed to be used as a means to prevent criticisms.
    • In recent times, it is more important that courts are seen to be concerned about accountability, that allegations are done by impartial probes rather than threats of the contempt action, and processes are transparent.
    • If the contempt has to continue, a review mechanism within the judiciary should be there as a safeguard against judicial tyranny.

    In an era in which social media are full of critics, commentators and observers who deem it necessary to air their views in many unrestrained and uninhibited ways, the higher judiciary should not really be spending its time and energy invoking its power to punish for contempt of itself.

    Conclusion

    • Globalized human society as a singular entity and individual societies are moving towards the consensus of a world where an individual has greater autonomy, rights and dignity.
    • Healthy and constructive criticisms are the necessary features for the development of democracy.
    • In this perspective focus should be given precedence over ‘dignity of court’, but not blindly.
    • In this backdrop, there is a need to revisit the need for a law on criminal contempt, where India can learn from Britain which abolished the offence of scandalizing the judiciary as a form of contempt of court in 2013 based on the fact that the law was vague and not compatible with freedom of speech.

    Also read:

    Office of the Attorney General and its role in contempt cases

    References

    https://www.thehindu.com/opinion/lead/the-chilling-effect-of-criminal-contempt/article32198138.ece

    https://www.thehindu.com/news/national/the-hindu-explains-what-is-contempt-of-court/article32249810.ece

    https://www.prsindia.org/report-summaries/review-contempt-courts-act-1971

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1311828

    https://thewire.in/law/supreme-court-contempt-of-court-respect-constitution-power

    http://www.legalserviceindia.com/legal/article-2638-contempt-of-court-a-comprehensive-analysis.html

    https://www.thehindu.com/opinion/editorial/scandalising-as-contempt-the-hindu-editorial-on-proceedings-against-prashant-bhushan/article32198126.ece