Economic proficiency is vital for better decisions by the judiciary

The judiciary would gain by consulting experts on issues related to business and economic matters

- NITIN PAI

A few months ago, the Karnataka government amended the state’s cinema regulation rules to cap ticket prices at ₹200. The multiplex industry association challenged this in the high court and secured a stay order.

The state government appealed, upon which a division bench of the high court maintained the stay, but required movie theatres to keep auditable records of every single ticket sold, including the price, time stamp, mode of booking, mode of payment and so on. This was to facilitate refunds should the industry association lose the case. This in turn was stayed by the Supreme Court earlier this month, albeit with the comment that “prices should be fixed” to make cinemas more affordable.

At first glance, this saga is about the constitutionality and wisdom of the state’s direct intervention in competitive markets. At a deeper level, it is about how the judiciary is dragged into matters of economic policy. Sometimes, as in this case, judges are called upon to decide on the legality of a piece of economic regulation. At other times, judges respond to public interest litigation with judgements that are tantamount to economic policy. The question is: how competent are our judges to make calls concerning economics?

Judicial decisions affect large sections of the economy about everything from cinema ticket prices to bankruptcies, environmental clearances, labour and tax disputes. How can the courts develop the technical expertise across vast fields of economics to make good judgements on policy matters?