ECONOMICAL BARRIER THROUGH A LAW SECTOR IN INDIA – CRITICAL ANALYSIS
- Role of law and legal systems in economic development of india
- How do laws and legal systems affect economic development ?
- Understanding and improving the laws and legal systems on which an economy is built could be propitious for economic development.
- Why do we need a legal system which enforces economic growth?
Fig. 1. Source: World Bank Fig. 2. Source: PRS Legislative Research -The pendency of courts in India is extremely poor, and sadly, is on the rise.
Figure 3. Source: Statistics Times
Legal System with respect to the Indian Economy or How do laws and legal systems affect economic development? : the legal system of a country significantly affects the economic development of that particular country. India is also not separated from this fact. We have been experiencing that the Indian legal system is having a consistently negative impact on the economic growth of the country. There is a huge pendency of cases in the courts, there are strict trade regulations, and the judiciary is not analyzing or comprehending any of the economic aspects of their decision which are causing huge barriers to economic growth in India. India always had very diverse economic trends in the country itself. Economic growth especially in India is both, geographically and sector-wise, concentrated. The data, as collected, shows that between the years 1970 and 2004, fastest growing states are namely Andhra Pradesh, West Bengal, Gujarat, Karnataka and Maharashtra, which grew over two times as fast as slow growing states.
The five richest states have received disproportionately very high share of capital, which is about 55% of the total stock, whereas the poorest five have only 15%. Almost half of total FDI approvals goes to the five most prosperous states. The growth in the economy is also sector-wise concentrated in only the high skill and service related industries. Hence, this shows that legal institutions and the legal policies are having a huge impact on the economic growth of India. The State’s primary task in the economic world is to formulate and enforce laws and rules which bolster the economic growth and development of a country, and the needs and values of the private sector drives the operation of the public sectors. Law has two roles to play in order to bring economic development in a country.