By Dilip Bobb
The International Monetary Fund (IMF) is a leading financial agency of the United Nations and tasked with helping achieve sustainable growth and prosperity for all of its 191 member countries. It’s latest report for 2025 on India, emphasises, among other economic growth-related issues and proposals, the need for significant “judicial reforms” in India.
What the IMF is basically suggesting is that a more efficient and transparent judiciary system in India will facilitate economic development. The key points the IMF report makes is that judicial reform is a critical component for improving India’s overall economic landscape and streamlining the judicial system could significantly increase private investment. The potential areas for judicial reform as contained in the report, includes reducing case backlogs, improving court efficiency, enhancing transparency, and strengthening the indepen dence of the judiciary. Greater openness may promote a better judiciary to the extent that investors reward rules-based business environments as businesses adapt to global standards. Additionally, competition in domestic markets helps reduce the monopolization of power.
The IMF analysis suggests that even a moderate improvement in India’s judicial system compared to other emerging markets could significantly boost private investment. The IMF has consistently urged the Indian government to prioritize judicial reforms alongside other structural changes to achieve sustained economic growth.
Even the World Bank’s World Development Report emphasized that the rule of law is “the very basis of good governance needed to realize full social and economic development,” but that the existence of laws does not assure these outcomes.” The Bank’s focus on “the role of law” means that the effective role of the judiciary also plays a key role in control of corruption. This also includes law and order (basically the police and other investigative agencies) and protection of individual and property rights which are seen as critical to economic outcomes. Among the other issues seen as key to judicial reforms in India is the huge backlog of cases, shortage of judges in many lower courts and the growing and unmanageable number of undertrials. What these financial institutions are saying is that a modern, efficient judiciary isn’t just an economic necessity—it’s a cornerstone of India’s aspiration to become a global leader, or as the Prime Minister is fond of reminding us, Viksit Bharat@2047.
While this may be a case of reopening old wounds, the ground reality regarding the challenges to that ambition makes for depressing if oft-repeated reading. India boasts the unenviable record of having the most pending court cases in the world. As of 2024, the pending cases across different levels of the judiciary crossed 51 million, including more than 1,69,000 district and High Court cases that had been pending for more than three decades. Notably, district courts alone handle over 87 percent of these cases, or roughly 45 million, an indication of the huge burden at the grassroots level. A NITI Aayog strategy paper reckoned it would take more than 324 years, considering the prevailing rate of case disposal, to clear the backlog of 29 million cases. The pending cases are anticipated to cost India 1.5 percent to 2 percent of its GDP. The World Justice Project’s Rule of Law Index 2023 ranks India 111 out of 142 nations in civil justice and 93 in criminal justice, both reflecting significant court delays.
Outside the reforms mentioned by the international financial bodies, the India Justice Report (IJR) produced annually by the Tata Trusts, has also emphasised areas where judicial reform is required. Its Report for 2024-25 is a comprehensive quantitative index that assesses the capacity of Indian states to deliver justice. It ranks states based on indicators across four pillars: police, judiciary, prisons, and legal aid. The Report says that among larger states (population over one crore), Karnataka was ranked the best and Uttar Pradesh the worst. Among smaller states, Sikkim topped the group with Goa at the bottom.
The Chief Editor of the IJR 2024-25 writes in the introduction: “There have been fluctuating trends in financial contributions for justice-related sectors. Across all sectors, utilisation rates tend to be lower than budget estimates. Similarly, there has been a reduction in allocations for improving judicial infrastructure.” One area the Report highlights is the sharp cuts in police modernisation funds. The Modernisation Fund for State Police Forces was introduced to enhance police infrastructure and upgrade the Crime and Criminal Tracking Network and Systems (CCTNS). In 2019, the Centre allocated nearly Rs 900 crore for the fund, which declined to Rs 780 crore in 1921 and has further dropped to Rs 587.97 crore. Even more troubling is the low actual expenditure. Despite an allocation of over Rs 600 crore in FY23, only Rs 34.7 crore—a mere 6 percent—was spent on police modernisation. The Modernisation of Prisons Fund, introduced over two decades ago to improve prison conditions and build new cells, also experienced a funding cut. Although the fund’s allocation peaked at Rs 400 crore in FY23, it has been reduced to Rs 300 crore in the last two years.
There are, fortunately, some bright spots as pointed out by other reports and independent findings. One being that schemes like NALSA (National Legal Services Authority) which provides free legal aid to the indigent, has seen an increased allocation. From Rs 200 crore, this was raised to Rs 400 crore in 2024. NALSA has also reported 100 percent fund utilisation from 2018-19 to 2023-24. Similarly, the infrastructure development fund for the judiciary, a centrally sponsored scheme aimed at enhancing judicial resources in states, has been efficiently utilised over the past five years.
Over the years, those involved in the judiciary have also pointed out the flaws in the system. The Supreme Court admitted that the “rate of convictions in criminal cases in India is abysmally low. It appears to us that this factor weighs on the mind of the court while deciding bail applications in the negative sense.”
Judicial reforms in India have primarily focussed on modernizing the legal system through technological advancements like digitizing court records, online case filing, and e-court services, aiming to increase accessibility to justice, reduce case backlogs, and improve efficiency by adding more judges, promoting Alternative Dispute Resolution (ADR) mechanisms like mediation and arbitration, and providing legal aid to underprivileged citizens. Key aspects include establishing fast-track courts for specific cases, improving infrastructure, and streamlining court procedures.
Recently, while addressing a symposium on judicial reforms, the Supreme Court’s Justice Surya Kant emphasised that all stakeholders—judiciary, bar and the law minister—must sit together to find avenues for judicial reforms in the country, which according to him, is the springboard for economic growth. Justice Kant stressed the need for “a robust judicial system where investors readily invest in the country”. Further, the timely appointment of judges is necessary at all levels and both quality and quantity are necessary in this regard. “Once the quality comes, we should sensitise them that it is their duty towards the country. If it happens, the result will be good”, he added.
The earliest institution set up in independent India in 1955 for law reforms was the Law Commission. However, as the Supreme Court itself pointed out: “It is manifest that many of the important recommendations made by the Law Commissions, from time to time, have not even been properly discussed, leave aside their implementation by the Government.” Then we also had the National Mission for Justice Delivery and Legal Reforms which was set up in 2011, and most recently, the National Court Management Systems (NCMS). That is, sadly, the problem of too many cooks spoiling the legal broth.
Legal experts have suggested having a single agency to look into judicial reforms and specifically into delays in implementing them. That may need yet another Commission to decide on which agency, its constituents, its brief, and powers of implementation. Recounting the challenges to judicial reform is like retracing a tired and well beaten path, but as the IMF says, such reforms are essential to attract investment and encourage economic growth. As long as politicians stay out of the judiciary, and the judiciary stays out of politics, the easier it will be to implement the long-awaited reforms.
—The writer is former Senior Managing Editor, India Legal magazine