Saturday, October 04, 2014

Repeal 100 laws

An earlier version of this appeared on two days ago.

Fixing the laws is fixing the Republic

Badly drafted laws are at the heart of the failures of government in India. All too often, in India, laws feature sloppy drafting (inducing legal risk), have vague objectives (hampering accountability), and give sweeping powers (inviting abuse). Of particular importance is the role of sloppy drafting coupled with absence of accountability in generating arbitrary power in the hands of the executive. You have to `respect' the executive because it has arbitrary power.

Today there is a thicket of nearly 2,000 central laws, alongside hundreds of state laws, processes, rules and regulations, The Gazette of India fares badly on publishing central legislations, making it impossible for citizens to know all the laws through which government has powers over them. Everyday life has become a minefield: a person never quite knows what laws he is violating.

Remedying this situation requires large scale rewriting and cleaning of the statute books. The first step is outright repeal of obsolete and anachronistic laws. The second is creating a new wave of well-drafted laws which clean up one sector at a time. A well-drafted law is precise, principles-based and will make sense for a long horizon. One example of this is the Indian Financial Code, which aims to replace all existing financial law. Drafting high quality law is a complex and time-consuming process.

Both strategies -- outright repeal and new drafting -- are required to clear the thicket, reduce complexity, uncertainty, mis-governance and opportunities for rent seeking, and ultimately to put the Republic on a sound foundation.

Three groups of laws that require fixing

Three groups of laws are of prime importance in cleaning up the undergrowth:

  1. There are laws from the colonial era which are irrelevant or misplaced today, as the world has changed. Some of these were specifically enacted to curb the independence movement.
  2. In particular, during the Second World War, many laws were passed which reflected the exigencies of the war. In numerous areas, freedoms of Indians were taken away to make it convenient for the British war effort.
  3. The laws from the socialist period, roughly 1950 to 1980, where the government sought to achieve a dominant role in the economy. Many times, the dirigisme which was initiated as a wartime measure ossified into a system of control under socialism. The years around the Emergency in particular had laws which gave a tremendous increase of State power, the after effects of which are still plaguing the country.

The zone of careful rewrite

While all the laws under these three categories merit review, in many cases, outright repeal is neither feasible nor desirable. Three examples are instructive:
  1. The Forward Contracts Regulation Act of 1952 has as its objective the prohibition of options trading. This is not an objective that we wish to pursue today. However, the solution does not lie in a simple repeal of this Act; what is required is a complex drafting of a new law (i.e. the Indian Financial Code).
  2. The RBI Act, 1934, was proposed by the British as a `temporary measure'. It is a badly drafted legislation, and has given us an under-performing central bank, but the solution is not a simple repeal but the complex drafting of a new law (the Indian Financial Code).
  3. There are huge problems with the Indian Penal Code in areas such as freedom of speech. In a sense, the IPC of 1860 (written three years after the mutiny) is incompatible with the Constitution of India when it proposes to imprison a man for committing the crime of speaking. But this is not a simple repeal. What is required is a deeper rewrite of criminal law - e.g. by setting up a Criminal Justice Legislative Reforms Commission a la FSLRC.

The zone of outright repeal

In 2014, a collaborative project was initiated between three organisations -- Centre for Civil SocietyVidhi Centre for Legal Policy and the Macro/Finance Group at the National Institute of Public Finance and Policy -- that aimed to identify 100 laws that can be simply repealed. This initiative came at the back of the new government's undertaking to clean the statute books. The initiative identified laws that are completely out of touch with today's India, where almost everyone would agree that they do not belong, and where there are no complexities other than a simple repeal.

The report of this project has a compact presentation of each of these laws, based on thorough research. This document is a hall of shame of the 100 laws that have no reason to exist. Once there is consensus about this work, a simple `Repeal of 100 Laws Act' can be drafted which eliminates these 100 laws.

In the past few weeks, the government has built momentum towards fulfilling its promise of repealing dated enactments -- however, these have focussed largely on low-impact house keeping repeals. This is no doubt crucial. The 100 Laws Project however, goes a step beyond -- it has assembled a package of both low impact repeal recommendations (40 of which have been included by the 20th Law Commission as part of its Legal Enactments Simplification and Streamlining project/248th Report), as well as gathered evidence to recommend repeal of high-impact laws that materially affect business climate and government effectiveness.

Achieving a modern and capable State in India undoubtedly requires more work. There are surely more than 100 laws which merit simple repeal. There are thousands of laws, which can be removed through more complex drafting projects. Most important of all is the constructive agenda, of drafting high-quality laws which create an accountable government with clarity of objectives. However, in that larger journey, this project is a useful and immediate building block.

A team of experts sifted through the landscape and chose 100 laws that are ripe for repeal. Let's look at the distribution of the date of these laws:

Distribution of the date of the 100 laws

We see a bimodal distribution with one hump at old British laws and another reflecting the period of India's socialism. The vertical lines focus us on the socialist period, 1955-1980, and the red line is the year of the Emergency, 1976. This gives us insights into the time periods which produced laws that obviously merit repeal, and may help increase the productivity of future projects which sift through laws.

World War 2 does not show up as a bump in this graph. Perhaps what is going on here is that the restrictions which were introduced here, such as capital controls, ossified into complex systems of socialist control, and resist simple repeals.

Reinvigorating the legislative process

In the past, the drafting of laws was dominated by the executive. As an example, the Ministry of Rural Development drafted the National Rural Employment Guarantee Act, 2005. The founding team of SEBI drafted the SEBI Act, and RBI staff have repeatedly had a role in drafting amendments to the RBI Act. This method of drafting generates a bias in favour of sweeping powers and low accountability.

For the health of the Republic, it is important to have independent voices involved in drafting and critiquing laws, and to create public debate on the substance and impact of new and old laws. In recent years, we are starting to see the evolution of think tanks away from traditional economic policy analysis towards a greater understanding of, and an involvement in, the legislative process. Examples of these organisations include Centre for Policy Research, Parliamentary Research Service, Centre for Civil Society, Vidhi Centre for Legal Research, Indira Gandhi Institute for Development Research and NIPFP. An array of independent writing now dissects laws and regulations, and creates resistance against badly drafted laws. This is an important and welcome new phase in the policy process in India -- in the maturation of the Republic -- one we think should be received with enthusiasm by the new government.

1 comment:

  1. Ah ha! Your secret agenda is exposed! See p67, "Weekly Holidays Act, 1942": "In principle, India should aim to move towards a system of employment solely governed by mutual contracts signed by employers and employees." In the midst of a hundred-page document, the real aim slips out.

    Come the Revolution, you will be shot!


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