Judicial delays: An economic burden

Inefficiencies in the judicial process are stifling growth and investment in India

The Chief Justice of India has done well to identify delays in case resolution as denial of justice.

Judicial delays are a problem: in other countries as well, but India is probably among the worst globally.

According to the World Bank Doing Business Survey, the average time taken to enforce a contract through the court in India stood at 1,445 days (almost four years) and was among the lowest five countries¹. Of course, the World Bank Survey has some flaws, as surveys that seek to capture global differences do tend to suffer from comparison challenges. But irrespective of where we stand on any global ranking, the fact remains that judicial delays are a serious problem in India causing untold suffering and, of course, denying justice to many.

What is surprisingly not as well understood is the harm that delayed case resolution has on the economy.

This is because delayed cases are so endemic, and work in such complex ways that measurement is difficult.

Courts across all states and Union Territories suffer from a high level of judicial delays, which occur at all levels and types of courts and across both civil and criminal cases.

Delayed case resolution has many adverse ramifications on economic activity. It leads to the locking up of assets, land or other resources that can't be used optimally or flexibly, and regular decision-making itself gets impacted for many years if not decades.

According to one estimate, as much as $200 billion is locked up in land-related conflicts in India. The second class of impacts includes the legal costs, which are not just legal fees but also the cost of time and effort of senior management, and these persist for a long time. We don't find studies that quantify these figures in any robust manner, but given the prevalence of delayed case resolution, it would no doubt be significant.