Economic Impact of Select Decisions of the SC and NGT

• 23 Jun 2022

For Prelims: Supreme Court, NITI Aayog, NGT

For Mains: Sustainability and Economic Development

Why in News?

Recently, the report titled Economic Impact of Select Decisions of the Supreme Court and National Green Tribunal of India (NGT) has been submitted to the NITI Aayog.

• The study was conducted by CUTS (Consumer Unity and Trust Society) which was commissioned and fully funded by the NITI Aayog.

What are the Key Highlights of the Study?

• CUTS studies the economic impacts of various judicial orders which includes five environment-related major orders of the Supreme Court and the NGT.
• The study includes:
  • The Goa Foundation vs M/s Sesa Sterlite Ltd & Ors, 2018
  • The Hanuman Laxman Aroskar vs Union of India (Mopa Airport Case), 2019
  • The Tamil Nadu Pollution Control Board vs Sterlite Industries (I) Ltd (Sterlite Copper Plant Case), 2019
  • The National Green Tribunal Bar Association vs Ministry of Environment & Forests and Ors (Sand Mining Case), 2013
  • The Vardhman Kaushik vs Union of India & Ors (NCR Construction Ban Case), 2016
• Economic Impacts of Environment Related Five Judicial Orders:
  • The analysis of economic impacts due to five select environment-related court orders estimates that 75,000 persons were adversely impacted from mid-2018 to mid-2021 due to restrictive orders related to environment.
  • The Government of India lost revenue worth Rs 8,000 crore from mid-2018 to mid-2021.
    • If this revenue had been spent as capital expenditure, the economic returns would have been to the tune of Rs 20,000 crore.
  • Of the five verdicts, the study estimated 16,000 persons lost their jobs.
  • The industry lost close to Rs 15,000 crore in revenues and workers lost around Rs 500 crore of income.
• Case Study of Ban on Mining in Goa:
  • State Public Debt Increases:
    • Due to the ban on mining in Goa, the state public debt increased at a Compound Annual Growth Rate (CAGR) of 10.06% from 2007 through 2021.
    • The market loans taken by the state increased at a CAGR of 19.93%, consequently due to mining suspension.
  • Revenue Deficit in both Centre and State:
    • The central and state revenues cumulatively suffered an estimated deficit of Rs 668.39 crore in taxes paid by the mining companies,
    • Whereas the state revenues exclusively suffered an estimated deficit of Rs 1,821.32 crore.
  • Loss in Mining Companies:
    • Mining companies are estimated to have lost Rs 6,976.71 crore during 2018-19 and 2020-2021.
  • Loss of Employment:
    • The net loss of employment (both direct and indirect) comes to almost 15,000 jobs in mining closure case.

What are the recommendations of the study?

• Strike Balance:
  • It recommends the need to equip the judiciary and judges on how to strike a balance between the economy and the environmental factors.
  • For instance, on the National Capital Region construction ban case, the ineffectiveness of procedures adopted by the judiciary and the executive in curbing pollution highlights the existence of loopholes in set procedures and system owing to various reasons such as capacity and expertise constraints, paucity of resources, etc.
• Need for Subject Specialists:
  • It highlighted the need for subject specialists / experts guiding the judges on cases that involved economic impacts.
  • It recommended that selection procedures of judges should also be changed.
  • For better quality of judges, the law on National Judicial Commission could be revived.
  • However, it is equally important for judicial officers to be exposed to (basic) economic issues to recognize the need for a holistic and balanced decision and approach.
• Accountability for the Judiciary:
  • It also prescribed accountability for the judiciary to ensure a high standard of jurisprudence analysis and decision-making.
  • In cases where strict adherence to legal provisions may lead to substantive economic losses, the decision-making of the SC should be guided by the larger public good.
  • The apex court must demand accountability by levying fines and penalties on officers and politicians involved in outright corruption and maladministration cases.
• Transparency at All Levels:
  • It is thus important to inform the decision-making process at all levels, including the judiciary, keeping in mind the larger objective of human-centricity of economic development and environmental sustainability, with equal considerations to the objective of equity, environment, and economy.

Source: DTE