Summary

• The Proposed Constitutional Amendment Act empowers the parliament to decide which census will form the basis of delimitation through an ordinary law which can be passed with a simple majority. The constitutional stipulation to delimit after every census is done away with, and delimitation will now happen at the mercy and will of the Parliament and the Central Government.

• The Delimitation bill proposes the ‘the latest census when the commission is notified’ ad the census to be used. However, this stipulation can be changed by a simple majority in the future. The power under this delimitation bill continues beyond the present proposed exercise of delimitation.

• The power to notify the commission, including the power to decide when to notify the commission and effectively which census applies to each state, lies with the Central Government. This power to decide which census applies must be constitutionally entrenched rather than being subject to the whims of the Central Government.

• The actual total number of seats in the expanded Lok Sabha is not defined in the proposed amendment or the bill, and may be left to be decided by the Delimitation Commission. The proposed amendment only changes the upper limit on seats to 850 from the existing 550.

• The principle of proportionality to population, as in the latest census, continues. There is no concession made to the southern states of a pro-rata increase where their seats increase in proportion of their existing seats, etc.. No promises made to Southern States stand incorporated in the bills.

• The term duration of the Delimitation Commission must be fixed to avoid surprise decisions right before elections and to improve predictability. It was fixed under the previous act, and there are no pressing reasons for the change under the new bill.

• Unless an independent appointment of the Chief Election Commissioner is secured, this process promises to be a charade because of the extensive administrative involvement of the Election Commission and a vote by majority. The opposition must also have an independent say in the constitution of the delimitation commission itself.

• No methodological basis for the rotation of seats for women is laid down in the proposed amendment or the act. It is unclear when and how such a rotation will be done in the proposed amendment or in the bill.

• The size as well as the composition of the Rajya Sabha is untouched, creating a structural tension. The upper house and effectively the states lose their relative strength, with important consequences for instance, in joint sittings.

• The NDA does not have the required numbers to pass the proposed amendment unless it is supported by some non-alliance parties, especially from the North, on this issue.

In what follows, I will give article-by-article comments on the proposed amendment bill and the delimitation bill.

The Constitutional Amendment Act

I. Amendment to Article 55

Article 55 pertains to the Election of the President. The article in its original form mandates a uniform scale of representation in terms of its population across states as far as possible. The explanation in this article had a proviso that the relevant census would be the first census after 2026. That has now been done away with. The Parliament may, by law, ascertain which census is the relevant census (the latest census before the delimitation notification, as per the Delimitation Bill) for determining the population for the election of the president. This can be a cause of confusion if some, but not all, states have had delimitation simultaneously notified qua them.

II. Amendment to Articles 81 and 82

In the amended Article 81(1), the cap on the total strength of the House of the People elected from States is increased to 815 members. The cap on the strength of Union Territories is increased to 35, with the caveat that the actual number of seats is not specified for the strength of the House of People elected from states and Union Territories.

We must be circumspect that the proposed delimitation amendment and the delimitation bill do not specify the actual number of seats. It must also be noted that the final power to determine the strength of the Lok Sabha may vest in the Delimitation Commission or the parliament. The actual strength has not been defined in the amendment or the bill proposed; only a cap has been proposed.

As per Art. 81(2), which has been continued as the original, the principle of representation in proportion to population continues to be the sole governing principle, subject, of course, to reservations for SC, ST and Women.

Pro-rated increase as per the existing proportion, as is promised by the BJP leadership, is impossible unless Art. 81(2) is amended and the proposed Delimitation Bill reflects that the distribution will not be according to the latest available census but according to a pro-rated proportionate increase. The government may seek to interpret “so far as may be practicable” in Art. 81(2) to accommodate the demand; however, it is an unreasonable interpretation and it is a stretch to suggest that actually following the proportions is not practicable. A clear amendment may be a more desirable course. The government may be unwilling to touch Art. 81(2) for any changes to it expose the process to a basic structure judicial review for violating federalism and voter-equality. Art. 81(2) is therefore a tight-rope walk for the government. In any case, the Delimitation bill must be amended if the BJP government intends to act on this promise.

However, this was the most important change desired by the South Indian States—Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and Telangana— which has not been granted even in any limited measure. If the 2011 or the 2026 census applies, southern states stand to lose a lot of seats to the north. See the charts below for a ballpark estimate:

Source: Yogendra Yadav on X

Finally, in 3(b) of Art. 81; there existed a proviso for locking the first census after 2026 for delimitation. Further, this clause had a default that ‘population’ was to be determined as per the latest census whose figures have been published. These have been removed.

III. Amendment to Art. 82

As per the proposed amendment to A. 82, the delimitation of constituencies is no longer constitutionally mandatory after each census. When a delimitation is due shall depend effectively on the wisdom of the Central Government as to when it is necessary to constitute a Delimitation Commission. Yet again, the parliament may proscribe the discretion available to a delimitation commission as to which census is relevant or what is the “manner” of delimiting; subject to the principle of proportionality to population, as in Art. 81(2). The third proviso locking the population for the number of seats to 1976 and apportionment to 2001 is deleted.

The parliament has expanded its discretion to ascertain which census is to be used for determining the relevant population through ordinary law instead of an amendment requiring a special majority. For instance, in 2045, even when the 2041 census figures are published, the Parliament may, by law, choose to deem that the 2026 census is the relevant census by making a law through a simple majority.

This choice of which census is relevant is too sensitive to be left to the whims of the Central Government, either through a simple majority or by choosing the date on which the delimitation commission is notified, now or at any time in the future. It must be constitutionally entrenched.

Even if the Central Government wants to control precisely when delimitation happens, such control can be exercised while the principle of the latest census remains constitutionally entrenched.

IV. Amendment to Article 170

The delimitation of state assemblies is no longer subject to reservation for the Anglo-Indian Community as in Art. 333. This is not a very relevant change. The range of the number of seats in the legislative assemblies continues to be between 60 and 500 and has not been changed. The UP legislative assembly might need an expansion if we are to maintain the ratio of number of MPs to number of MLAs roughly constant across major states. This has not been considered. We might want to reconsider the upper limit of 500 MLAs only for UP to ensure a more effective representation ratio for Uttar Pradesh legislative assembly.

In the explanation to 2(b), a stipulation for a relevant population and census similar to the Lok Sabha is stipulated. Here too, the mandate to delimit after every census is done away with, and the stipulations about locking in till after the first census after 2026, using the 1971 census to determine total seats and the 2001 census to decide apportionment, are done away with.

V. Amendment to Article 330, 334A

Here too, the parliament is empowered by law to determine which census is relevant for reservations of seats for the Scheduled Castes and the Scheduled Tribes. The ‘First Census after 2026’ stipulation is removed for women’s reservation, too. For women’s reservations, the fifteen-year sunset clause, subject to extension by the parliament,t continues.

The Political Bundling of women’s reservation and delimitation is deliberate. This is sinister and aimed at conflating the two issues, making it difficult to criticise one without appearing to criticise the other. The original stipulation that the first census after 2026 will be the relevant census has now been done away with, without ever having been employed. It gives the impression that such a stipulation was added as a smokescreen to eventually merge the issue with that of delimitation and mislead the people. This political chicanery is grossly unsuited to important constitutional questions that require deliberative consensus.

Delimitation Bill

S. 1(2) Power to Notify, S. 3 Constitution of the Commission, S 7(4)

This Bill (after becoming an Act if it does) comes into force only when the Central Government chooses to notify it. Latest Census Figures, as per this act, mean the latest census figures available on the date of the constitution of the Delimitation Commission. The Central Government, under this Act, has the power to appoint a Delimitation Commission from time to time through a notification. This is a continuing power exercisable under the Act at the sweet will of the Central Government. The Central Government may also choose the date of appointment of the Delimitation Commissions in the future as it deems fit.

It must be noted that the parliament may, by a simple majority, amend this law to prescribe any other census year that they think the Delimitation Commission must use. Earlier, this provision was a constitutionally entrenched provision that the proposed amendment seeks to do away with. When the Central Government notifies a Delimitation Commission, whatever the latest census figures available are the only ones that must relevant to the exercise. However, that has now been moved from the constitution to a simple legislation giving the Central Government a lot more discretion on the issue. This must be read in light of our discussion on amended articles 81 and 82.

While this is a stretch, we must also consider that the Delimitation Commission (say in 2045) could be notified state by state (because the SEC is a member of the commission for that state only) on different states. It may be lawfully possible to set up a commission for different states on different dates, thereby making them liable to different censuses. This is crucial because judicial review of delimitation is limited to mala fides and ex facie arbitrariness only. The delimitation commission must be notified for all states together, and subject to a single cut-off date. Because this legislation will continue to be the law on this subject matter, an express stipulation to that effect may be useful even if it is trite.

Members of the Commission

The Commission is chaired by a Supreme Court judge chosen by the Central Government. The Chief Election Commissioner or his appointee and the State Election Commissioner are ex-officio members. The decisions of the commission are made by these three people on the basis of a majority vote. (S. 7(4)) We must be extremely circumspect about the immense power reposed in these. The statutorily fixed term duration of the Delimitation Commission has been altered to grant discretion to the Central Government. It must, however, also be specified expressly, as it was in the earlier statute, to avoid the process from becoming a never-ending exercise or to avoid strategic timing of commission notifications close to the announcement of state elections.

Independent Appointment of CEC necessary

The Chief Election Commissioner is appointed by a panel composing a majority held by the Central Government as per the Chief Election Commissioner and Other Election Commissioners (Appointment, Conditions of Service and Term of Office) Act, 2023. This Act was enacted in the face of the 5J decision in Anoop Baranwal. Unless the appointment of the Chief Election Commissioner is made by a neutral panel, the delimitation commission faces a strong constitutional challenge. The challenge to the 2023 Act is pending in Jaya Thakur v Union of India. It raises serious apprehensions of bias in the party ruling in the Central Government.

A Delimitation Commission must not be allowed to be appointed ex parte by the Central Government at this time in history, where trust in the Central Government and the BJP is at a historic low country-wide. The State Election Commissioner is a career bureaucrat appointed by the Governor on the advice of the government then in power in that state. Their impartiality, too, cannot be guaranteed. Then, the CEC and SEC might have an effective majority, irrespective of the opinion of the Supreme Court judge or the advisory opinions of the associate members. S.7(4) empowers the commission to decide by Majority.

Further, the conduct of Mr Gyanesh Kumar has raised serious doubts both about his impartiality and the impartiality of the appointment process that led to his appointment. Just because historically this has been the nature of the delimitation commission, we need not accept it. We operate in times of historically low trust. The delimitation in Jammu and Kashmir that created a lopsided majority in Jammu too, has raised doubts about gerrymandering. Likewise, the delimitation in Assam has been rightly questioned. All Political Parties must take serious note of this possibility of rampant gerrymandering.

Appointment of the Delimitation Commission, as well as the Chief Election Commissioner, must be done by an independent body with representation for the opposition parties and the Supreme Court in the appointment itself and not unilaterally by the Central Government. Without these changes, any attempted delimitation is a farce that raises serious doubts as to impartiality. Without changes to the appointment procedure of CEC and Election Commissioners and a role for the opposition in the appointment of the Delimitation Commission, this exercise must not be allowed to go through. The Secretary to the Delimitation Commission shall be one of the Secretaries to the Election Commission of India. The extensive role and involvement of the Chief Election Commissioner cannot be overstated. Therefore, the appointment of an independent election commissioner is a precondition to any serious exercise of delimitation.

A constitutional challenge to the Delimitation bill, if it becomes an act, could be sustained only on the issue of the appointment of CEC and the selection of members by the Central Government in such an important exercise as delimitation. It is an affront to the separation of powers.

S 5 Associate Members

Associate Members of the Commission are to be appointed as per the composition of the House of the State Assembly and representatives from that state to the Lok Sabha. These members cannot sign or approve any order of the commission, and their role is merely advisory. They can at best raise their contentions in dissent notes. The power to appoint these members is with the Speaker of the respective House. The principles for the selection of these members must be encoded in the statute. They cannot be left to the whims of the speakers, given their increasingly partisan record in the recent past.

The Delimitation Commission can make decisions even in the absence of a member or when the seat is vacant. This provision must go. Unless all three members of the Commission are alive and active, the Commission must not be allowed to make orders on Delimitation. While S. 6 mandates the Central Government or the Speaker to appoint alternate persons as soon as may be, it is wise to statutorily block the commission from operating when there is an unfilled vacancy.

S 4 Duties of the Commission

The Commission is tasked with deciding a) the allocation of seats in the House of the People (Lok Sabha) for States and Union territories, b) the total number of seats in the Legislative Assembly of each State and c) the division of each State and Union territory into territorial constituencies. The total number of seats is here presumed to be predetermined. We may presume that the upper limit given in the proposed amendment is the actual number of seats.

However, this must be clarified. Does “allocation” in S. 4 refer only to apportionment or the total number of seats in the House of People as well? Effectively, are the 850 seats the actual number of seats or merely the upper limit?

S. 8(C) second proviso, S. 9(e) Seats Reserved by Rotation

The Seats for Women are to be reserved by rotation as per S. 8(2)( c) second proviso. However, the act does not stipulate how the initial lot of seats is to be reserved for women. Would rotation mean that the first allocation is made randomly? Will it be rotation according to random selection without replacement? Or is the commission expected to apply specific criteria for determining the seats? For instance, is it important that women are selected from urban as well as rural seats within and across states? Then would a stratification be made before randomly choosing seats? This should be spelt out clearly in the Act itself. The same should also be clarified for seats reserved for SC and ST women.

Is this to be according to the election cycle, by dissolution, or only by delimitation? This needs express constitutional specification. The actual total number of seats, as well as apportionment for women, has been left to the delimitation commission and has not been circumscribed in this act. The limited guidance comes from the overall cap in the Constitution itself. It would be useful for the Central Government to clarify this.

Further, the act requires that the MP: MLA ratio, as far as possible, be an integer so that, as far as possible, the parliamentary constituencies have an equal number of legislative assembly seats.

The bills consciously skip amending the number of seats in the Rajya Sabha. This creates a gross imbalance between the Lok Sabha and the Rajya Sabha. This allows ordinary bills to be steamrolled in joint sittings of the parliament, as in Art. 108.

While some of the concerns in this article can benefit from clarification by the Central Government, the promises, if any, must be hard-coded into the legislation and the amendment itself.

Whether the NDA has the numbers

The amendment bill must be passed by two third majority of the members present and voting. It must also be ratified by half the states by passing a resolution because it affects the ‘representation of states in the parliament’ by effectively changing the composition of the Lok Sabha.

The NDA is unlikely to be able to muster support on the constitutional amendment unless it is supported by abstentions and parties voting along unexpected lines, with the view that they stand to benefit from the proposed amendment.

In matters of Delimitation, we must trust no one. It is a long-term political strategy with immense consequences. The Polity is a buffalo everyone wants to tie in their backyard. Often in these bargains, people stand to lose. Examples of failed delimitation due to non-representation, failure of consensus, court intervention, excessive gerrymandering, and loss of public legitimacy are too many to count and have, in some cases, had serious long-term consequences. Northern Londonderry, Ireland (1922), Kenya (2024)[see chapter 2], Sri Lanka (2017), and New York State (2014) are all examples where delimitation has been intensely contested. India, too, does not have a kind history with redrawing boundaries.

The Political effects of this are obviously likely to spread far beyond the parliament. Mr Stalin has, in no equivocal terms, made this known. Other leaders from the south are likely to join him—Mr Siddharamaiah, Mr Revanth Reddy have already joined the protest. It is, in any case, a cause of national embarrassment that this important legislation was released two days before the session, stealthily and without prior consultation at the peak of the election season in West Bengal and Tamil Nadu. The BJP is mistaken if it thinks it can push this bill through parliamentary deliberation alone without wider consultations with states from Southern India. This is the biggest federal bargain in independent India, and it is unlikely to be an easy roll-over that the BJP is so used to. This bill is but the beginning; a testing ground of a long-overdue struggle to renegotiate Indian Federalism.

(This is an early and quick analysis of the proposed amendment, the bill enacted and its political stakes. I have not dealt here with the Union Territories Bill but only with the Delimitation Bill and the Amendment Act.)

One of the earliest Black Magic sensations in Maharashtra was the Manwat murders in Parbhani. The accused approached quacks who advised them that the only way to bear children was to sacrifice virgin girls to the ghost of Munjaba that resided in the Peepul Tree, and accordingly, five girls under the age of ten were killed, and blood was extracted from their private parts to be sprinkled on the tree as “naivedyam.” For those of us who may be surprised, black magic continues to haunt the Indian criminal scene. (See 1, 2, 3, 4, 5 )

The recent Mr Kharat incident in Maharashtra has become a national embarrassment and exposed Maharashtra’s Godman Problem. Maharashtra has had a sustained, vociferous movement against black magic and exploitation by self-proclaimed Godmen; a struggle of reason against exploitation. [see in Anand Patwardhan’s documentary Reason Part 1, Part 2] There is much to be said about the depraved Godman-Political nexus in Maharashtra that runs deep and runs on mutual blessing and their modus operandi. There is also much to be said about Reason, Religion, Exploitation and Magic itself. However, much more able and courageous minds than mine in the rationalist movement have written and spoken about these. The Kharat incident offers an important occasion to revisit the statutory scheme of the Black Magic Act.

Introduction

The Maharashtra Prevention and Eradication of Human Sacrifices and other Inhuman, Evil and Aghori Practices and Black Magic Act, 2013 (hereafter ‘black magic act’) was enacted after a protracted struggle by the Rationalist movement^[1] in Maharashtra.

Dr Dabholkar, whose work and memory continue to inspire us

The original draft bill had within its scope a wide range of superstitious activities, which, however, were later tempered and balanced with the fundamental right to religious faith and conscience and watered down to make political concessions to the Fraudulent Babas and their ilk. The act, in its current form, therefore came with much deliberation and left a range of actions outside its ambit. The bill was first notified as an ordinance and then passed in the assembly, finally in 2013, becoming the first legislation of its kind in the world. This act was also translated from the original Marathi into English and has been bodily lifted by some other states to create their own version of this act.

It has been twelve years since the passing of this act, but judge-made law has not developed sufficiently for a doctrinal analysis. Most cases available in the High Courts are bail applications and criminal writs for quashing. While the NCRB does not record data for Black Magic offences separately, anecdotally, the conviction rates have been low, with poor understanding of the act cited as a common reason. In Pune, out of 58 FIRs under the act, no accused got convicted^[2]. Proponents of the act have primarily blamed poor training of police for the failure of this act. The police, too, have sometimes registered complaints in cases where no such offence was made at all: for instance, in cases of fraudulent caste certificates, marital disputes, the accused cutting hair of the alleged victim in the name of black magic, and the like. The courts have not considered the non-bailable offence created under the act and proceeded to grant bail before completion of the investigation, too. This enactment has received little academic attention despite its radical emancipatory potential.

A cursory history of legislation pertaining to criminal superstitious practices would be useful. Amongst the first of these was the Bihar Prevention of Witch Practices Act, 1999. Following Bihar(1999), Jharkhand(2001), Assam(2015), Chhattisgarh(2005), Odisha(2013), and Rajasthan(2015) have made laws prohibiting witch-hunting and a central legislation was also tabled^[3] as a private member bill but could not be passed. The Maharashtra act however, was comprehensive and had an express purpose of social communication about Black Magic and defining offences at a specific level. It penalised twelve instances of rationally unfounded behaviour that led to physical or financial injury. This model law has also been modified and enacted in Karnataka, but without modification in Gujarat. The same model law is pending consideration in Haryana, and Kerala is reworking its bill. A private member's bill on this was also presented in the Rajya Sabha.

Argument Summary

In this article, I argue that at least some of the poor implementation of the act stems from its shoddy drafting. Other states have indiscriminately copied the Maharashtra statute, carrying its confusions into their statutes. The offences in Black Magic Statutes were sought to be defined precisely to avoid false prosecutions by the police; the current style of drafting, however, adds to the confusion rather than removing it. The statutes’ connection with BNS and other related statutes that the police are familiar with have hitherto not been laid out clearly. I will solely analyse the text of the statute in the light of the history, preamble and the objective of the act to clarify some preliminary confusions regarding this act. I will also demarcate the provisions of the act to understand the relation of these offences with offences already under IPC/BNS. I will highlight those offences that do not correspond to BNS separately. I will also study other offences operating in conjunction with BNS and analyse some defences available under BNS. While grouped as twelve offences, the schedule has over 30 specific acts that are punishable. The objective of this article is to clarify some aspects of the act and convert the 12 schedule offences given in the act into a coherent scheme of offences consistent with the BNS. This exercise would be fruitful and useful to police, legal officers and other states reframing or adopting a version of this act. With this article, I wish to start a conversation about the gap between the potential of this idea, its statutory form and its implementation. This act has provided a crucial anchor to the Rationalist and Anti-superstition movement in India after the passing of Dr Dabholkar and Com. Pansare. Nothing in this article must be read as a criticism of the act itself, but only of its statutory design. This is then not an argument against the act, but an argument for strengthening it through cogent design.

Scheme of the Act

The preamble of this act demarcates that the act has primarily four purposes: i) Promoting awakening and awareness against ignorance against claims of magical powers and other practices ii) protection from injury, exploitation caused by sinister design on conmen in the name of supernatural power or evil spirits iii) combat and eradicate human sacrifice, and other inhuman, evil, sinister and aghori practices iv) prevent damage to belief in authentic and scientific remedies and cure. These provide necessary interpretive guidance.

One salient feature of this act is that the complaints under this act have to be made to a designated vigilance officer, not under the rank of Inspector of Police appointed as such by the government for each police station. In Maharashtra for Commissionerates, the officer is an ACP and for other districts, the officer in charge of the Local Crime Branch. The Vigilance Officer has also been granted power for search and seizure at all reasonable times, subject to the procedure that becomes necessary when a warrant under S.97 BNSS is issued. Further, one crucial difference between an offence under this act and a corresponding offence under the BNS is that an FIR under 5(2)(i) of this act is actionable only if filed by the victim or his family; while under the BNS, a complaint for a cognizable offence can be filed by any person to whose knowledge the offence comes. While these safeguard is necessary for some offences, for “claim only” offences [see schedule 1] such safeguards must not be necessary.

There already exist some provisions covering supernatural offences in extant criminal law. For instance, BNS S. 171, 354 also cover some offences related to divine displeasure. The Drugs and Magic Remedies Advertisement Act also operates in conjunction with the act. The Black Magic Act is routinely invoked with a range of BNS offences and some of the offences listed herein can be said to already have been covered by S. 45, 50, 55 (Abetment), S.61 (Criminal Conspiracy), S. 64 (Rape), S. 69 (Intercourse by deceit), S. 74, 75, 76 (Sexual Harassment and Assault), S. 86 (Cruelty), S. 96 (Procuration of Child), S. 103, 109 (Murder), S. 105, 110 (Culpable Homicide) and S. 114 to S. 120 (Hurt), S. 126 (Wrongful restraint), 127, S. 137 (Kidnapping), S.138 (Abduction), S. 303 (Theft) S. 308 (Extortion), S. 318 (Cheating) and S. 351 (Criminal Intimidation). These cases frequently would also involve general defenses as in S. 14 (Mistake of Fact), S. 22 (Act of Person of Unsound Mind) , S. 25 (Act not intended to cause death done by consent), the idea of consent in S. 28 and S. 29 (Consent under fear or misconception) and threat in S. 32 (Act compelled by threat).

What do the special offences under this act do in addition to the existing offences under BNS as enumerated?

Definition of black magic or aghori practices and S.3 of the Act

The definition of offences in an umbrella act tying disparate acts with a common orientation is a challenge. The offences under the black magic act are not defined, neither in definitions nor as distinct sections, but are prescribed as a schedule. The black magic act does not attempt to exclusively define ‘human sacrifice’, ‘aghori practice’, ‘inhuman practice’ or ‘black magic’. Nor does it organise thematically on the issue of superstition by the type of injury caused. The act recognises that by themselves, no matter which way is defined, all acts related to black magic cannot all be criminally culpable. The act prescribes to the last detail, a list of 12 combinations of injury and supernatural claims that would constitute offences and makes all of them punishable under S. 3(2), 3(3). The Goondas Act provides a useful contrast. There, the offences are proscribed as per the class of offence. Various classes of offenders are then described in relation to the specific offences committed under specific acts they have committed. Further, offenders are punished for any act to give effect to their specific class of offence, but in a manner that offends “public order”.

The reason for the peculiar drafting style has important historical reasons. One crucial requirement in framing was that the act also needed to guard against an interpretative expansion and abuse by the police. Further, this act had to respond to social and political pressure to clearly exclude some acts of faith from its remit, as done in the savings clause S. 12, and only punish precise combinations of superstitious acts causing specific injury. The act also needed to ensure that the definitions are not over-inclusive to avoid a future art. 19(1)(a), 19(1)(g) and art. 25 and art. 26 constitutional challenges. This choice of framing has come at a substantial cost to clarity and legibility in the existing criminal system. Let’s now turn to the definitions and S.3 itself.

S. 3(2) of the black magic act defines the offence as “any advertisement, promotion, propagation or practice or causing to promote, propagate or practice human sacrifice, himself or through another person, human sacrifice and other inhuman, evil and aghori practices and black magic mentioned or described in the schedule” (“schedule practices” hereafter). “Person” following 2(26) BNS or General Clauses Act 3(4) includes non-natural persons. The act and its provisions apply to companies, trusts and societies as well, including within its ambit directors and trustees, as the case may be.

‘Propagation’ in the Maharashtra Act includes publishing any literature, article of a book and also includes any form of direct or indirect help, abetment, participation or cooperation about scheduled practices. It is noteworthy that the Karnataka Act also punishes “persuasion” for and “facilitation” of such acts. Persuasion and facilitation are uncommon phrases in criminal procedure and may have to be supplied with their dictionary meanings. They also probably intend to expand the scope of abetment. Abetment and attempt to advertise, promote, propagate, or practice scheduled practices are also offences in S.3(3). All S.3 offences are non-bailable and cognizable. There is no guidance on whether any of the offences are compoundable in the act; presumably, then, it could depend on the BNS character of the impugned act. The offences being non-bailable provide a strong independent reason for the police to register charges under this act and ensure that such charges survive beyond the stage of cognisance. The vulnerable nature of the victim and eye-witness, and a strong possibility of destruction of evidence that is in the custody of the accused, is a strong ground for resisting interim or regular bail under the act.

The Schedule of the Act

Many offences in the schedule require a high degree of mens rea, specific connections of causation and even specific outcomes which trigger the provision. Some also require that a particular pretext about claims of supernatural powers, or expelling a ghost, be established before being admitted as an offence. Where witnesses are under coercion from the community of followers and from the religious institution, unless there exists a video recording properly procured following the S. 63 BSA, successful prosecution can be very challenging. The argument on mens rea and the pretext of the offence is the fulcrum of the entire statute.

Mens Rea

S. 3 also does not provide any standard for Mens Rea. We must carefully parse the schedule to identify which offences require mens rea and which do not. As the law develops, one possibility could be to impute a strict liability for all offences, including promotion, propagation and practice. Any accidental or negligent propagation or communication of a scheduled practice or incidental participation or co-operation with such acts could be punished. Another possibility would be applying the mens rea as if it were an act done in the BNS. For instance, abetment, if not by conspiracy or instigation, in BNS S. 45 (c) requires intentional^[4] aid by act or illegal omission. However, S.3 does not refer to intention. As I shall show later, most provisions in the schedule also do not refer to any standard of intention. Standards of attempt are also not prescribed for the different scheduled offences, while adding that punishment for attempt or abetment would be the same as that for the offence as per S. 3(4). In these cases, it is especially difficult to distinguish between preparation and attempt. Inchoate offences may be harder to prosecute under this section.

Standard of Harm

All offences in this schedule restrict injury to physical, mental or financial injury. There are some offences of injury to reputation that fall in a class as offences punishing humiliation. These offences seem to have also been included so that police intervention can happen much before the incidents escalate into something more grave. Unless physical harm, mental deception or fear or financial injury can be proven, no provision of this act is attracted. That forms the effect of the acts prosecutable under this enactment. Purely psychological harm is outside the ambit of the act.

The question of consent to some of these acts is insufficiently addressed. S. 25-30 (particularly S. 25 and S. 26) of BNS deal with acts done with consent and in good faith in general. In general, in offences not amounting to grievous hurt or acts likely to cause death or done with the intention of causing death, consent is a valid defence. Because these acts depend on harm and sometimes only result in hurt but not grievous hurt, the question of consent becomes material and relevant to prosecution. The current act does not address it sufficiently. It could be argued that none of the acts done with the consent of the victim is punishable. It could also be argued that the consent is vitiated by fear or force in such circumstances. See, for example, the old case of R v Poonai Fatemah, where the accused, holding himself out to be a snake-charmer, persuaded the deceased to be allowed to be bitten by a snake. The accused claimed that he could protect the accused from harm. The court held that consent given by the deceased victim was vitiated by misrepresentation. S. 3 (22) of the General Clauses Act defines good faith as “a thing shall be deemed to be done in ‘good faith’ where it is in fact done honestly, whether it is done negligently or not.” Good faith requires only honesty and not a particular mens rea. This complicates prosecution substantially. One particularly useful device would be the use of the rule on similar fact evidence codified in S. 14 of the BSA. Where similar events have occurred over and over, the burden to prove mens rea would be much easier to bear.

In the section that follows, I examine the mens rea, actus reas and circumstance that will have to be proven for specific acts mentioned in each clause of the schedule. I follow the structure of the BNS for tractability. Because of this peculiar drafting, it is difficult to (i) precisely identify the necessary elements of a particular offence, (ii) define inchoate offences, (iii) establish the evidence necessary, (iv) frame charges as per BNSS Chapter XVIII, including questions of joinder of charge, what constitutes a single transaction and other such difficulties. See this recent case [Rohan Kulkarni v State] where the court upheld a discharge order because: the complainant could not establish harm, he voluntarily attended seminars, contents of an alleged CD were brought up much later.

Offences against the body – Assault, hurt

The original Marathi draft of the act refers to this class of offences “Maar-Haan”, which translates to “hurt” but has been translated in English as “assault”, both of which have distinct legal meanings. This is seen in clause (1) and clause (7). The states that have copied the translated statute have copied the errors too. In clause (1) of the schedule, the BNS offences of hurt, grievous hurt, assault, assault to cause dishonor and sexual assault are all erroneously clubbed together. If the harm is self-inflicted, that too is not covered. Voluntary hurt has generally been excluded as it raises critical questions of consent. Forceful ingestion of other inhuman substances like cow dung and ash has been excluded from clause (1) too. The definition risks being too specific. It is necessary first to establish that the motive of acts in this clause was to dispel ghosts^[5]. Clause (1) only prosecutes offences done “under the pretext of expelling the ghost.” [See Appendix] This clause will not apply if the pretext is not of expelling the ghost, but any other pretext. Once established, it would invalidate through a legal fiction any defence as to mistake of fact^[6] arising from a true belief of the accused that a person was indeed possessed by a ghost or any defence on consent of the victim that is available in BNS. This is likely the most important provision of this act.

Offences under clause (7) are also made out if “hurt” is caused or daily-life is disrupted in the name of jaran maran, karni or chetuk, which are specific acts that are necessary to be recorded in FIR. Under the Karnataka Black Magic Act, like the Assam Witch Hunting Act, any act done under the schedule that leads to the death of a person amounts to murder under 100 BNS. The element of mens rea stands dispensed with. Such a provision could have also been included in the Maharashtra Act. Similar presumptions have been added for attempt to murder and suicide in the Karnataka Act. These ensure that the prosecution's interest in making a clear charge under the black magic act is retained. Further, there are certain offences of social boycott that could be prosecuted alongside S. 3 of the Prevention of Social Boycott Act, 2016. However, offences under that act are bailable and therefore offences under the Black Magic Act provide more teeth to the prosecution.

Further, any partial defences on intention in S. 100 BNS are disabled. The Karnataka Act has also incorporated contextually informed offences^[7]. For instance, pulling a chariot with a hook attached to the body or hanging from a hook (even with consent), segregating menstruating women or parading women naked, killing an animal by biting their neck, requiring persons to roll over food leftovers, firewalks and jaw-piercing with rods are all included in the schedule. This contextualization must guide future state acts too.

Offences akin to cheating

In clause (2) of the schedule, it has to be proven that a miracle was displayed, and money was earned because of such a display. Where there is any other justification for paying the money, for instance, proving the causation beyond a reasonable doubt becomes increasingly difficult. Contrast this with the BNS provision on cheating alone. Dishonest intention in BNS could be, in some cases, inferred from mere failure to fulfil a promise.^[8] The evidentiary requirement for cheating is arguably lower. Further, for what looks like a separate offence within clause (2), it must be proven that this act was done to “deceive, defraud and terrorise people by propagation and circulation of so-called miracles”. In this part of clause (2), where the act uses “and”, “or” was likely intended. One cannot be required to prove defrauding, deception and terrorising. Firstly, because each of those verbs actualises distinct offences. Secondly, requiring proof of mens rea for deception, defrauding and terrorising, all three together, to merely constitute an offence is too high a burden and contrary to the purpose of the act and does not fit harmoniously with the leading sub-clause of this clause itself. Thirdly, even under BNS, deception by itself with a loss constitutes an offence. Intent to defraud^[9] requires an intent to actively cause financial loss. Mere deception in the name of black magic without injury certainly will not lead to prosecution under this act. ‘Terror’ has a specific meaning in criminal law. In the context of TADA in Hitendra Vishnu Thakur, the Supreme Court held:

“Terrorism” has not been defined under TADA nor is it possible to give a precise definition of “terrorism” or law down what constitutes “terrorism”. It may be possible to describe it as use of violence when its most important result is not merely the physical and mental damage of the victim but the prolonged psychological effect it produces or has the potential of producing on the society as a whole.

…..

Experience has shown us that “terrorism” is generally an attempt to acquire or maintain power or control by intimidation and causing fear and helplessness in the minds of the people at large or any section thereof and is a totally abnormal phenomenon. What distinguishes ‘terrorism’ from other forms of violence, therefore, appears to be the deliberate and systematic use of coercive intimidation.”

Even if we, by a stretch, extend this definition, then to prove that some act was an attempt to “terrorise” has a very distinct connotation from mere deception or defrauding, and the attempt to club them together is shoddy drafting that is blind to proportionality. The courts have not read into these trivialities; they could pose a serious challenge. See this case where an advertisement of a Hanuman Chalisa Yantra was blocked under the Cable TV regulation, and prosecution under this act was also initiated.

Further, propagation as per S. 2(d) includes any direct or indirect help, participation and co-operation. It is unclear whether such indirect participation would have to be intentional or if mere accidental participation would suffice. For example, dishonest intention cannot be imputed to indirect participants who do not know the causation between the miracle and the financial gain, for instance.

Propagation of “any” miracle cannot be deemed to be an offence. However, claims of some miracles are, by themselves, offences. For instance, merely claiming to perform surgery by fingers or claiming to change the sex of the foetus in the womb are both offences. Only the claim has to be proven to be charged under this act. All people aiding, abetting, or propagating such a claim can be prosecuted. Further, claiming that a mentally retarded person has supernatural powers to rob others is an offence. However, it is unclear if this claim would like against a person with any other disability. Further, while the word used is “rob”, the original Marathi “lubadnuk” is closer to meaning in S. 307 theft or S.308 extortion and must be construed accordingly. Robbery in S. 309 requires the use of arms; that certainly cannot be deemed necessary for prosecution under this act. Here, the distinction between whether such an act was done with fear or injury, or deception or without consent is relevant. Robust evidence of a claim of supernatural power is essential. Further, any mentally retarded person himself cannot be punished under this clause.

Clauses (3), (4) and (8) have circular definition. They mention “aghori, inhuman and evil practices” which, in the definitions clause (S. 2(b)), have been defined as acts in the schedule. It is difficult to exactly delineate which acts are aghori, inhuman and evil by perusing the schedule. However, one may identify some key elements. First, the act must be related to magic or an extra-rational occult practice where cause and effect relations cannot be proven within reason with knowable facts. Here, by “fact”, I mean “fact” as defined in the scheme of the Indian Evidence Act.

“Fact”.––“Fact” means and includes––(1) anything, state of things, or relation of things, capable of being perceived by the senses;

(2) any mental condition of which any person is conscious.

Second, the act must cause physical injury or financial injury as defined in 2(14) of BNS with the intention to create fear or deceive. Any such act could presumably be punished under this statute. However, given the complicated drafting, the offences are difficult to identify and prosecute. This is also codified in S. 12(3) of the savings clause, for instance. This is the only reasonable method of interpretation that can allow us to break the circularity in definition.

In (3), the necessary elements are the pretext of a “view to receive supernatural blessings” and causing danger to life or grievous hurt. The grievous hurt here could be self-inflicted or inflicted on others. However, when it is self-inflicted, it cannot be prosecuted under S. 5(2)(i) of this act unless the victim or their family lodge a complaint. It is similarly punishable under BNS, or this act, both. The Karnataka Act takes this contradiction of self-reporting further by adding more offences that involve the participation of the offender directly in harm caused to himself, as discussed with the case of “pulling a cart by hooks attached to the body” above.

Offences Emphasising Fear

Under clause (5), “creating an impression by declaring that power inapprehensible by senses has influenced one’s body or another person has possessed such power” and then causing to induce fear or threatening with evil consequences for not following one’s own or such other person’s advice is an offence. Further, deception, defrauding and deterring using such induced fear are also offences. Threatening with evil consequences merely for not following advice is a threshold similar to criminal intimidation. In criminal intimidation, the agent who would eventually cause the injury is still human and causing alarm is a necessary ingredient. If the element of threat or intention to cause fear or fear caused is not proven beyond a reasonable doubt, the act can be saved S. under 12(7) as mere advice. The boundary between mere advice and threat is crucial and depends on the nature of evidence led about the intention of the advice giver, how the victim(s) perceived it and what actions they took. Similarly, for the first part of (4), it can be said that unless injury is caused or fear is intentionally and knowingly induced or a threat of evil consequences is issued to defraud, deceive or deter, 12(7) would save the search for water, bounty and the like as a motive without culpability. It is then very easy for the defence to spin off threats as mere advice.

Using Karni or Bhanamati for this gain motive is an offence in itself without any mens rea required, and therefore, such a defence would not be available then. Human Sacrifice is prohibited if done in the name of jaran maran, where soil touching the feet of a person is packed in a doll, and the person would meet the same fate as the doll. The act also seeks to punish other human sacrifice offences, “like” those in the name of jaran-maran, but is unclear about the precise import of this phrase. Human Sacrifice in such cases is best prosecuted under BNS 103 as murder. The Haryana model bill is clearer that Human Sacrifice for any gain or pleasing any deity is an offence under the act. Creating fear in the public at large by invoking ghosts or supernatural powers has also been deemed an offence under that act. Creating fear without a direct act or communication to expressly create fear is difficult to prove and prosecute

Offences against Reputation

Clause (6) pertains to bringing disrepute to any person and projecting her as a potential cause for a future injury in such a way that makes her living troublesome, miserable or difficult. Making people believe that anyone can use black magic, mantra-tantra or superstitious power to reduce milching capacity of cattle, or that someone brings misfortune, or is a cause for diseases, are illustrative ways of how this may be done. This provision is very widely worded. If prosecution can establish that a person was propagating that the victim is bringing misfortune^[10] so as to cause him difficulty, that is sufficient to constitute an offence. Here, the requirement for mens rea is fully dispensed with. Mere evidence of actus reas suffices. However, causation between his propagation as such and ‘difficulty to the victim’ must be necessary. Declaring someone a saitan is an offence. These two offences cover the witch-hunting offences of identifying a witch in S. 4 and 5 of the Bihar Witch-Hunting Act. Curing witch-affliction under S. 6 of that act is here covered in clause 1.

Sexual Offences

Requiring people to perform sex in public to get rid of ghosts (1); Parading them naked to rid of black magic (7) creates new and specific offences. Parading naked, as well as putting excreta or urine, are also criminalised in the Prevention of Atrocities Act S. 3. To create an impression of supernatural powers and claiming to be an incarnation, or that a devotee(read person) was a husband, wife or lover in a past life, to indulge in sexual activity is an offence. Intercourse, assuring motherhood to a woman unable to conceive through supernatural powers, is also an offence. Here, consent is acquired through deceitful means. What role consent would play is doubtful. This offence can also be prosecuted under S. 69 BNS Intercourse by employing “deceitful means” which includes fraud, manipulation and misrepresentation. However, if it can be proven that there was valid consent given by the woman otherwise, and such consent was not influenced by the impression of supernatural powers, such an offence cannot be punished under this clause, and one may even move for quashing of the FIR itself^[11]. Creating a specific offence certainly serves a useful function, and collecting specific evidence for conviction under this act will also aid the prosecution to make a better case under S. 69 BNS.

Medicine-related offences

Under clause 8, creating an impression that there is ghostly wrath, causing physical injuries and preventing a person from taking medical treatment is punishable; instead, diverting her to practices as described in this schedule is punishable. The reading of the section again appears to require all three elements. Prohibiting and preventing a person from taking medical treatment and instead prescribing the mentioned magic remedies is punishable. Prohibition and prevention are necessary. It is unclear whether a person is convinced without prohibition, either with supernatural fear or with deception, to forego treatment; it will still be punishable under this clause. It is also unclear if the use of criminal force is necessary to establish ‘prohibition’. These are new offences not covered under the extant law before and will require judicial interpretation. Advertisement of magic remedies is also covered in S.3 and S.4 of the Drugs and Magic Remedies Act. In case of dog, snake or scorpion bite (contextually specific, not any other disease), giving ganda dora or other such treatment (subject ot interpretation) and prohibiting or preventing treatment is an offence.

In these cases, it would be particularly useful for the prosecution to use S.61 of the BNS and charge multiple people with conspiracy where they appear to be connected and seem to have agreed to prevent people from seeking treatment. The evidence rule of conspiracy in S. 8 of the BSA can come handy to the prosecution.

Conclusion

Through this brief article, I hope to have demonstrated that there is merit in reorganising the entire schedule and creating separate offences and categories as delineated by the class of offences as demarcated in this paper. It will also enable the court to prosecute complex offences and their parts across multiple clauses of the schedule. This will substantially enhance the readability of the schedule. The police, when registering an FIR, routinely invoke S. 3(2) without reference to which specific offences in the schedule are alleged to have been committed. The courts, too, employ the catch-all phrase “black magic” to describe the act.

However, the offences under this act need specific evidence as to i) the impression created by the offender, ii) threat given or fear induced, iii) people involved in propagation and abetment of the harmful supernatural activity, iv) deceit, defrauding caused, and v) specific and precise supernatural claim. If these details are not in the FIR, it is harder to come by during the investigation. Further, there is a high likelihood of early destruction of evidence. Therefore, specifically defining the offences as distinct sections in this act and organising them in relation to BNS provisions is crucial and can serve useful ends, making the act more effective. It will also allow the police to register offences on multiple accounts in the act and allow the court to punish complex offences.

While prosecuting simultaneously under two acts certainly matters at the stage of sentencing, such an effect is more circumspect where the offences are complex offences made up of multiple parts. S. 9 BNS and S. 25 BNSS control the concurrent operation of sentences for the same offence and limit it to the maximum punishment under either offence. The act must also consider adding direct safeguards by way of instructions to the police to secure any person so threatened as described in this schedule from any further injury. This can be modelled along S. 21(1) and 21(2) of the Assam Witch Hunting Act. Further, fines on everyone in the community participating in the act must be contemplated. While the Maharashtra act include everyone cooperating with every act in the schedule, it does not identify the community as a site for propagating such violence. S. 15 of the Assam Witch Hunting Act expressly provides for it. There is no provision for compensation under the act.

Finally, a long line of precedents in the line of State of MP v Najab Khan have held that sentencing must be proportionate to the offence. S. 3 (2) provides punishment between six months and seven years, thus providing scant guidance to the judiciary on sentencing. This must be corrected by providing offence-specific sentencing guidelines.

Further, Hurt — S. 115, Wrongful confinement — S. 137, Criminal intimidation — S. 351(1), Cheating (simple) — S. 318, Act endangering life — S. 125, Cheating by personation — S. 319, Intentional insult to provoke breach of peace — S. 352 and such other offences are bailable under BNS however, non-bailable under this special act. If the charge under the act fails, the BNS charge revives, and the accused is entitled to bail. It is critical to impress that the powers of arrest for such offences under this act are stronger and can ensure better adherence to the triple test requirements. It is also difficult to demarcate which of the offences must be tried by the sessions court and which can be tried by the JMFC court. S. 4 itself provides no guidance in this regard. In such a case, the proximate BNS offence may have to be perused.

Incorporating these suggestions can make the act more comprehensive, easier to understand and effective to operationalise for the people, police and the courts. It has been twelve years, and the Maharashtra Government is yet to notify rules under the Black Magic Act. This clearly enunciates the political will not to enforce the statute. While Kantaru Rajeevaru is decided, these suggestions can open a new avenue for discussion on the state’s role on the boundary of religion, rationality, modernity and reform.

Appendix -1 List of single offence entries in the schedule

Claim Only Offences (Strict Liability, no mens rea necessary)

1. Claiming to perform surgeries with fingers

2. Claiming to change the sex of a fetus in a woman’s womb

3. Claiming to be possessed by or influenced by supernatural powers to create fear

4. Accusing a person of practising karni, black magic, or being under ghostly influence

5. Accusing a person of causing misfortune, disease, or harming cattle through mantra-tantra

6. Declaring a person as saitan or incarnation of saitan

7. Attributing physical injuries to ghostly wrath or supernatural powers

8. Threatening a person with death or physical pain through black magic

Claim or supernatural power or ghost with a particular act/consequence

1. Creating panic in the public by invoking or threatening to invoke ghosts or mantras

2. Performing black magic or aghori acts to discover treasure, water, or similar objectives

3. Threatening others with evil consequences for not following supernatural advice

4. Making someone’s life miserable or difficult based on superstitious accusations

5. Imposing bans or restrictions on a person’s daily life due to superstitious beliefs

Financial Exploitation

1. Declaring a mentally disabled person to have supernatural powers and exploiting others financially by using such claims about a mentally disabled person

2. Displaying so-called miracles and earning money from people

3. Deceiving, defrauding, or terrorizing people by claiming to perform miracles

4. Causing financial harm by practising or pretending to practice black magic

Hurt (Under the pretext of expelling a ghost)

1. Tying a person with rope or chain

2. Beating a person with a stick or whip

3. Forcing a person to drink water soaked with footwear

4. Forcing a person to inhale chili smoke

5. Hanging a person from the roof as part of a ritual

6. Fixing a person with rope or by hair, or plucking their hair

7. Causing pain by touching heated objects to the body or organs

8. Forcing a person to perform sexual acts in public

9. Forcing ingestion of urine or human excreta

Other Hurt, Grevious Hurt or Death

1. Practicing inhuman or degrading acts under the pretext of rituals

2. Performing inhuman, evil, or aghori practices that endanger life or cause grievous hurt

3. Attempting or committing human sacrifice in the name of jaran-maran or similar practices

4. Assaulting a person in the name of jaran-maran, karni, or chetuk

5. Parading a person naked as part of a superstitious ritual or punishment

Medical Treatment

1. Preventing a person from seeking medical treatment and diverting them to inhuman rituals

Sexual Offences

1. Claiming spiritual or supernatural connection (e.g., past-life spouse/lover) to engage in sexual activity

2. Having sexual relations with a woman by promising motherhood through supernatural power

Sources

^[1] Andhashraddha Nirmulan Samiti and the Maharashtra Andhashraddha Nirmulan Samiti, under the aegis of Dr Narendra Dabholkar and Prof. Shyam Manav notable among them.

^[2] Deshpande S. , Aug. 20 2023, Zero convictions in cases registered under Anti-Black Magic Act in Pune, Hindustan Times

^[3] Once in 2004, once in 2022

^[4] Also see Common Cause v Union of India (2018) 5 SCC 1

^[5] Contrast with S. 9 of the Assam Witch-hunting Act, where the offences are defined more specifically.

^[6] S. 14 BNS

^[7] See clause 8 to 15 of the schedule in the Karnataka Act

^[8] State of Kerala v A P Pillai (1972) SCC (Cri) 705(2)

^[9] S Dutt v State of UP, 1965 SCC OnLine SCC 6

^[10] See Assam Witch Hunting Act S. 11

^[11] One may use the reasoning now accepted and enunciated in Ms X vs. Mr A, 2024 INSC 216, to press this case

Eggs are an unusually nutrition-dense and cost-effective food. One of the most critical interventions in child malnutrition can be the provision of hard-boiled chicken eggs in school Mid-Day Meals (MDM), Anganwadi meals or raw eggs as a take-home ration for children and pregnant mothers three days a week. In this article, I will make a brief case for the provision of eggs and make a case for re-examining the dicta in Swaraj Abhiyan to defer to the Government on the question of choosing means to resolve malnutrition.

While the idea may seem a stretch, I locate it in the extant jurisprudence on nutrition, right to life, right to equality and the Convention on the Rights of the Child. I will first demonstrate why eggs in MDM and rations are a cost-effective and easy-to-implement solution that can reap abundant gains without effective alternatives. I will then try to inquire into whether such a change is possible by petitioning the courts.

Empirical And Administrative Justifications

Two eggs a day can help meet up to three-fourths of the daily protein requirement of a five-year-old child^[1]. Eggs are a rich source of riboflavin, good fat, calcium and vitamins A, B1, B2, B3, B6, B9, B12 and D3, which are otherwise difficult to get in vegetarian alternatives^[2]. There is abundant evidence on the effectiveness of eggs in reducing child stunting ^[3]and improving school learning outcomes like cognitive development^[4] and attendance^[5], and doing so safely^[6]. The National Institute of Nutrition recommends eggs for children as a full meal^[7]. The Food and Agriculture Organisation nutrition handbook recommends eggs as a key protein source. Fifteen Indian states already provide eggs in school. Besides, the World Food Programme’s school feeding programmes also regularly serve eggs. Brazil, Peru, Rwanda and South Africa mandate eggs and animal-source protein.

Two eggs cost about eight rupees per child per day. The gains in learning and nutrition far outweigh the costs of providing eggs; are largely progressive and can lead to better outcomes for women too. Eggs are easy to procure locally, need minimal cooking, are safe and beneficial to children's health and are often loved by children. About 14.5 crore children aged 5-16 are enrolled in government schools, and 9 crores between ages 0-6 are enrolled in anganwadis in India. Despite the National Food Security Act, 2013 (NFSA), the growth and nutrition outcomes in children have continued to be alarming and may have worsened.

According to government data, 37.7% children in anganwadis are stunted^[8] and 17.1% are underweight. Protein deficiency is the driver of malnutrition in India. Nutrition deficiency in early life affects cognition and intellectual abilities in ways that are incurable in later life^[9]. Loss of height and weight suffered early in life, too is incurable. Deficiencies in pregnancy, too, have similar life-lasting effects on the child^[10]. Improving the nutrition of the citizens is a primary constitutional duty^[11] of the Indian state.

The Problem

Yet sixteen states,^[12] including some of the largest and poorest states in India, do not provide eggs in schools or anganwadis. There are four political-ideological reasons for this. First, it is alleged that providing eggs in schools compels or induces vegetarian students to eat eggs. This can be easily rebutted by requiring written consent from parents or allowing eggs only as take-home meals. Vegetarian alternatives like bananas are now provided by other states and can also be provided. We could also begin by limiting the distribution of eggs to Aspirational Blocks, many of which are predominantly tribal. Second, eggs offend vegetarian morality and religious sentiments of Hindus, Jains and Sikhs, among others. Eggs in MDM or rations would be on a voluntary opt-in and withdrawal basis. Depriving a large population of the right to life and nutrition because of a vegetarian is a smaller and more powerful numerical minority in most states is constitutionally infirm and disproportionate. Third, it is argued that non-vegetarian diets can have an ill influence on children’s moral upbringing, making them violent or otherwise uncouth. This is entirely unscientific and is an argument without any evidentiary basis, and is founded on stereotypical unscientific myths about psychosomatic relations between diet and demeanour. Fourth, eggs offend historically dominant cultural preferences regarding dietary purity. Scholars on purity have rebutted the idea as a vestige of caste-hegemony alone. The proportions of vegetarianism in India are overstated for cultural approval and actually remain even lower than reported. This challenge too cannot be an insurmountable barrier to children’s nutritional safety.

Source: Data for India

The communities in which malnutrition is highest, that is Scheduled Castes and the Scheduled Tribes, are 87% and 88% non-vegetarian. 90% population of the poorest 20% people, where the malnutrition is highest, have a non-vegetarian diet^[13]. A blanket state-wide prohibition on allowing eggs in MDM is without any lawful basis and an unwarranted exercise of state paternalism that entrenches dominant ideological preference. It comes at a great cost to our children, as no food comes even remotely close to packing that much nutrition per rupee and with that much ease of delivery as an egg. Protein intake also varies by income deciles. This is borne out across surveys^[14] too. High malnutrition in India is also concentrated in specific districts and even blocks, including many tribal districts. This data must guide decision-making ^[15].

Source: NSS Survey on Nutritional Intake in India

The Legal Question

While there is abundant evidence on eggs as a superfood and while a large population seeks to enforce their right to nutritional security, political constraints create problems in procurement, distribution and a consistent policy concerning eggs. The National Food Security Act created a statutory right to sufficient proteins and calories, along with micro-nutrients^[16] for children and pregnant women. The statute does not, however, prescribe particular food items as essential parts of the diet. All guidance on eggs being a superfood comes from secondary scientific literature and does not have much legal force except being in the broader umbrella of right to adequate nutrition.

In Swaraj Abhiyan^[17], the Supreme Court rejected a writ specifically seeking to give eggs and milk under the NFS Act in drought-prone regions, holding that the states had discretion to decide how the necessary nutritional standards are met but had to implement this mandate of sufficient calorie and protein outcomes independent of any financial constraints. The States argued that there were equally effective vegetarian alternatives that would be preferred and the court was inclined to accept that argument.

The Courts, in light of the separation of powers and absent verifiable and judicially manageable standards, are wary of intervening in areas of policy and choosing appropriate policy instruments, state resources, etc. in matters of socio-economic rights and rightly so (See Baker v Carr for a clear exposition).

However, in the last decade, states have consistently failed to deliver the nutritional requirements to the children through effective alternate means, as was undertaken in Swaraj Abhiyan and as is required in the NFSA. This discretion vested in the state as a matter of policy has now collapsed into constitutional abdication. Discretion under Swaraj Abhiyan must therefore be reinterpreted and understood as being conditional upon outcomes, not permanent immunity from review and must therefore be agitated again. This could provide a window for eggs to be reintroduced in this legal debate.

Judicial deference must exhaust itself when the state continuously fails to deliver the mandate, especially of a constitutional right’s inviolable core—that is, the right to adequate and best possible nutrition as a part of right to life. As such, the dicta in Swaraj Abhiyan, ought to be revisited. The Indian Supreme Court must slowly move to adopt a heightened scrutiny of means in cases of socio-economic rights, following the tests of reasonableness and proportionality evolved in later jurisprudence, where the state fails to make effective alternate means available AND fails to secure the outcomes.

The state must justify why effective alternatives are not adopted when they exist. This approach is especially necessary where policy failure produces irreversible harm and where the beneficiaries—children and pregnant mothers—lack political voice. We could draw inspiration in making this argument from the Minister of Health and Others v Treatment Action Campaign and Others 2002, and the Grootboom line of cases in the South African constitutional court, to open an alternate avenue for scrutinising the means adopted to achieve socio-economic rights without encoding any direct minimal core of rights that the Indian Supreme Court has been averse to.

Some strategic caution

This issue obviously cannot be framed as a demand of the form that courts prescribe menus. It is a demand that, where statutory nutritional outcomes are persistently unmet, courts review the exclusion of demonstrably effective interventions under a heightened standard of scrutiny. The solution is for the court undertake a means analysis when outcome-achievement fails, provide for a transparent audit and mandatory reporting of outcomes as required in NFSA. Nothing more, nothing else. Eggs are not a question of policy but are an inevitable and effective alternative to secure right to nutrition as required under the NFSA.

Further, for such a move to succeed, the consensus on the nature of socio-economic rights of children, especially about malnutrition, must slowly shift within legal academia and the legal fraternity to become a) outcome-focused and b) less deferential to the government. Without these, it is difficult to press for a legal demand for eggs when vegetarian alternatives appear to have failed to be as effective. More research is also needed to i) demonstrate the effectiveness of eggs in Indian schools and to ii) independently (not state funded reports) examine why the state’s child nutrition programs have failed to deliver outcomes, especially in terms of diet diversity and intake of protein and vitamins.

The Courts have adopted a deferential attitude in matters of socio-economic rights, especially in prescribing particular means. That is the biggest barrier for any petition instituted for a writ that eggs must be served in schools. Anxiety about competence could be addressed by demonstrating continuous failure to meet the mandate of the NFSA and asking courts to merely review that failure without more. Evidence by way of affidavits and data must also overwhelmingly outweigh even the slightest concerns of ideology. A carefully demonstrated budgetary burden and cultural sensitivity framing can reduce government resistance

One way to minimise harm to the adjacent community rights if any, and address concerns about separation of powers, is using the judiciary to intervene at the level of particular blocks, districts or specific marginalised communities rather than seeking a state-wide mandamus demonstrating continuous failure of the NFSA mandate over a long period of time to show that excluding eggs has been hitherto devastating for the children. High Courts are more obviously better equipped to provide such localised remedies. That power can then gradually be expanded.

We should also plug any argument on slippery slope by demonstrating i) the gravity of the crisis, ii) the irreversible nature of the crisis, iii) the existence of an effective solution, iv) assuring that this solution is peculiar and distinct, and this won’t lead to a spillover into jurisprudence on socio-economic rights generally. Even a court order requiring the state to consider the feasibility of giving eggs after representations are made to the officers by senior experts will be a significant gain.

The court has also held that the nutritional standards in the NFS Act were the minimum, and the state could certainly exceed that mandate. Eggs can therefore continue to be provided as a supplement to the meals, as they exist. In PUCL v Union of India^[18] the Supreme Court emphasized that a state that does not respond to hunger despite having the means to do it fails in the duty imposed upon it by Right to Life under Art. 21. It is thereby crucial to subject this issue of whether provision of eggs is a prudent idea or not to constitutional scrutiny rather than leaving it entirely to a political negotiation that leads to gross failure in meeting statutory mandates.

If political concerns pertaining to faith must inform the policy of egg-distribution, it must be constitutionally balanced against the vegetarian citizens’ right to faith rather than abandoning it to political negotiation. The court will be ever hesitant to take up such a role and rightfully so. One must therefore also not bring this up unless necessary and inevitable.

It is useful to pursue the line that circumstances are extraordinary and may need thinking beyond usual doctrinal pontification on the balance of rights. We otherwise risk losing an entire generation to malnutrition despite having an acceptable solution. To reiterate, there is in any case no coercion to eat eggs, especially with safeguards such as necessary parental consent. The right to choice of food has been recognised as a part of an individual’s right to privacy too^[20]. The scheme can certainly be implemented in a manner that allows both rights to be preserved.

The argument on faith must be minimised. However, if it becomes inevitable, the right to religion^[22] provides freedom from state coercion and is subject to other fundamental rights and concerns of public health. Malnutrition has remained a massive public health crisis in India. This case could provide a good avenue to introduce and expand minimum core standards in Indian law. The right to religion cannot be read to enable dominant groups to impose their preferences on state-welfare concerns in matters of fundamental rights to life and maintenance of public health. Statutorily^[23], this mandate can also be situated in the NFSA, 2013, without any need for new legal enactments.

Eggs are the least restrictive means of achieving the statutorily mandated nutrition requirements. The alternatives are relatively more expensive, difficult to deliver or not as nutritious. There is no equally effective means that is widely available and can be delivered easily, either. Where the state has failed to discharge a burden, the burden of proof of suitability and necessity of means must lie on the state. There shall in any case be no infringement of individual liberty to not have eggs and persist with vegetarianism. This safeguard can also be further strengthened by requiring parental consent or by allowing only take-home rations rather than serving in-school to ensure voluntariness. The Convention on right of the child require attaining the highest attainable standards of child health.

Finally, on balance, the right to nutrition is sacrosanct, and the future of children depends on its survival or failing. The limitation of the group right of vegetarianism is not disproportionate to what is required to meet the nutritional requirements of children and pregnant women. The purpose of the right to nutrition must override moral concerns of vegetarianism and, in any case, cannot be said to be disproportionate. A blanket de facto prohibition on providing eggs in schools because of vegetarian concerns has a disproportionate impact on children and pregnant mothers, as is borne by data on nutrition outcomes.

Exclusion of eggs from meals and takeaway rations as a matter of policy is also indirect discrimination^[25] under Art. 14. This too has not been expanded to socio-economic rights and that makes it a difficult argument to sustain doctrinally. Non-inclusion of eggs and inclusion of alternatives is masked as a neutral policy of opting for neutral foods. However, this has had a demonstrable and disproportionate impact on malnourished students and mothers from marginalised backgrounds. This is especially true where vegetarian alternatives are harder to procure and administer, more expensive, and thereby failing in implementation. This leads to insufficient nutritional diversity in children’s and pregnant mothers’ diets. This constitutes structural discrimination against malnourished individuals and turns the constitutional burden cast upon the state on its head by worsening the position of children and mothers already placed adversely.

In Ajmal Ahmed^[26], the Kerala High Court did not allow a writ petition contesting dropping meat from the menu in Lakshadweep while fish persisted. The court inferred that diversity in foods is not a mandate of the NFSA or the MDM rules. Here too, the court relied on the dictum in Swaraj Abhiyan. The petitioners did not demonstrate the failure of the NFSA mandate and the existence of alternatives. The court framed this dispute as an exercise in choosing the menu. In an erroneous reading of the mandate under the NFSA, the court did not consider the various aspects of nutrition enunciated therein and stopped short of invoking the writ jurisdiction beyond a textual reading of the statutory rights.

Conclusion

The issue of the inability and unwillingness of the state to enter this political bargain can be resolved by attempting to constitutionalise the issue of egg provision. At the very least, it can open a window for renegotiation and re-entry of eggs in the debate on the judicial side. We must move from a vague right to nutritionally adequate food toward a reversal on burden in favour of eggs as the default means of fulfilling the right to nutrition. The state must demonstrate why a more effective alternative, where it is available and feasible, must not be provided. Eggs can occupy a unique position due to their nutritional density, cost-efficiency, cultural ubiquity, and administrative feasibility — making them distinct from being a gateway to broader non-vegetarian dietary mandates.

State must demonstrate in constitutionally cogent terms—district-wise and outcome-based—why eggs are excluded despite overwhelming evidence of their necessity. Adult moral preferences of specific groups must not continue to dominate the constitutional entitlement of marginalised children to life, health, and dignity. Eggs are administratively reasonable; they are the rights-protective default, and the children bear the cost for the omission. Pragmatism demands that states adopt the distribution of eggs to willing-students as soon as possible. The approach of legalising the issue must be adopted cautiously to not undo the gains of political movements thus far. A favourable court judgment and legal discussion, however, can provide a useful anchor to further this initiative. Even if this fails, an instituted transparency and audit mechanism could go a long way.

Appendix

Source: Swati Narayan, Jan 2024

^[1] At an average of 7g protein per day. A five-year-old on average requires 19 g of protein at 1g per bodyweight in kg.

^[2] Larson et al. (2024). Egg consumption and growth in children: a meta-analysis of interventional trials. Frontiers in nutrition, 10, 1278753. https://doi.org/10.3389/fnut.2023.1278753

^[3] Lora et al. Eggs: the uncracked potential for improving maternal and young child nutrition among the world’s poor. Nutrition Review Vol. 72 Issue 6 2014 https://doi.org/10.1111/nure.12107

^[4] Ernyey et al. Effect of egg consumption on early childhood development: evidence from Un Oeuf study. Public Health Nutrition Vol. 28 Issu 2 https://doi.org/10.1017/S1368980024002490

^[5] Karnataka mid-day meals: Eggs six days a week have increased attendance, says DSE, The Hindu

^[6] Myers, M., & Ruxton, C. H. S. (2023). Eggs: Healthy or Risky? A Review of Evidence from High Quality Studies on Hen’s Eggs. Nutrients, 15(12), 2657. https://doi.org/10.3390/nu15122657

^[7] Dietary Guidelines for Indians. (2024) ICMR National Institute of Nutrition, Telangana

^[8] Poshan Tracker Database. Figures for 2024-25.

^[9] Cabal-Herrera et. Al The impact of undernutrition and overnutrition on early brain development. Seminars in Pediatric Neurology. October 2025 Volume 55

^[10] Marshall, et. Al (2022). The importance of nutrition in pregnancy and lactation: lifelong consequences. American journal of obstetrics and gynecology, 226(5), 607–632. https://doi.org/10.1016/j.ajog.2021.12.035

^[11] Art. 47

^[12] Madhya Pradesh, Gujarat, Maharashtra, Rajasthan, Uttar Pradesh, Bihar, Arunachal Pradesh, Himachal Pradesh, Jammu and Kashmir, Uttarakhand, North-Eastern States except Tripura

^[13] NFHS 2019-21. Lower 90% demarcated using asset ownership data as a proxy for wealth.

^[14] NFHS 2019-21, NSSO Survey on Nutritional Intake in India 2023-24, NSSO HCES 2023-24.

^[15] We have adopted claims based on empirical data in Indian Constitutional Law to demonstrate failure of fundamental rights. Nitisha v Union of India for instance adopts the tests Fraser v Canada to establish indirect discrimination.

^[16] S. 4,5 and 6 r/w Schedule II.

^[17] Swaraj Abhiyan v Union of India 2016(7) SCC 498

^[18] PUCL v Union of India, 2001-2003 Daily Orders under the Continuing Mandamus.

^[19] As laid down in the Association for Democratic Reforms 2024 INSC 113 Para 157

^[20] Hinsa Virodhak Sangh v Mirzapur Moti Kureshi 2008 (5) SCC 33 Para 18. Also, in Puttuswamy 2019 (1) SCC 1

^[21] As laid in Mazdoor Kisan Shakti Sangathan (2018) 17 SCC 324 Para 60

^[22] Art. 25

^[23] To satisfy the requirement that a statute take away fundamental rights and not an executive order, as required in Bijoe Emmanuel (1986) 3 SCC 15 Para 16

^[24] As laid in Shayara Bano 2017 (9) SCC 1. It cannot be said to form the “inviolable core of the faith.” It is wise to exclude this issue as a matter of strategy to avoid being tagged with Kantaru Raajeevaru.

^[25] Lt. Colonel Nitisha v Union of India (2021) 15 SCC 125 Para 70

^[26] Ajmal Ahmed R v Union of India

Other references:

1. Express opinion

2. EPW on eggs

3. Right to Food Campaign Material

4. Reply in the Parliament on PM Poshan and Eggs

5. Hindu Article on the increase in attendance after giving eggs in Karnataka

6. Express on the politics of eggs in Maharashtra

This video was taken down by the Government citing emergency powers under the IT Rules. Courtesy: The Wire

Recently, an utterly funny cartoon video on the Honourable Prime Minister caused much brouhaha and ruffled the state bureaucracy. The government, in turn, asked Instagram, Twitter and others to take down the cartoon with much alacrity and without even hearing the hosts or creators before the takedown, citing a threat to defence, security and foreign relations. Calling a cartoon based on matters of public record a threat to security and defence is nonsense at best. Given the long tradition of satire, cartoons and irony in Indian Politics, this attempt to regulate humour was unwelcome and imprudent. We must reclaim the space for humour and satire, and this short edit is my bit towards that alone.

Satire in Democratic Politics

A Government that intends to maintain a minimal democratic political appearance must classify ridicule and satire as funny and not funny and nothing more or nothing else. Political Satire subjects politics to lay scrutiny and embodies the essence of a democratic impulse. Satire is a device to retain the serious spirit of the political material while unshackling it from the institutional facade that gives it a divine appearance. Especially, where the state machinery operates in a reified maze of august rules and projection of charisma, the smallest gaps in those provide an avenue for human emotion to enter and flourish in those gaps and widen them. Humour is the most natural of human emotions accessible to all. Satire then ensures that democratic politics remains a healthy space in touch with human feelings. Satire facilitates the participation of citizens in discourse and aids the growth of a political consciousness in democracy.

Satire and Cartoons in the Indian Tradition

Indian tradition has long recognised that power has a serious moral and psychological problem, and power must be immune to routine embarrassment at the hands of thinkers, poets and the media. Kavayaha Nirankusha is the age-old wisdom: A poet alone is unrestrained, and wings of her flights of fancy ought not to be clipped for any reason. The Supreme Court in Devidas Tuljapurkar propounded this global view: “There is no authority that gives a license to a poet. These are words from the realm of literature. The poet assumes his own freedom, which is allowed to him by the fundamental concept of poetry.”

Humor and Satire are essential artistic expressions of a democratic citizenry’s moral courage. People’s moral courage then acts as a limitation on power. Acharya Vinoba verbalised the idea of moral courage as an ankush (Lohia’s Maryada, JP’s Lok Shakti are in a similar vein) on political leadership. Without this ankush of moral courage, democracy risks becoming a theatre of obscure rituals. Satire is but one expression of this spirit and must be constantly guarded from usurpation or capitulation by the State. In DC Saxena, the Supreme Court advanced this view, holding that even vehement, sarcastic and unpleasant criticism of public officials cannot be stifled as it encourages a politically sophisticated electoral debate.

Even a novice-level cursory look at the biography of Indian tradition on satire is sufficient to tell us how much the Indian culture has valued its right to political satire and ridicule. Harishankar Parsai and Sharad Joshi in Hindi were the torchbearers of Hindi political satire. Raghuvir Sahay and Akbar Allahabadi in Urdu; PL Deshpande, VP Kale and Acharya Atre in Marathi, Cho Ramaswamy in Tamil; Nabarun Bhattacharya in Bengali and umpteen others have named and ridiculed the greatest of political leaders in India. Indian folk tradition, including the Tamasha in Maharashtra and the Bengali Jatras thrived on satirising political leadership and their acts to deliver them to the commonest of the commoners with humour. Scores of Bhakti poetry thrived on satire on God-complex, the moral order, the priesthood and all classes holding power. Mushaira and Hasya Kavi Sammelan housed political satire and were enjoyed by the political leadership and the citizenry alike. Satire and Humor as a civic virtue was recognised, and persons with special skill in satire were always celebrated in the tradition.

Cartoons form a rich and modern subset of this tradition of political satire generally. Gajendranath Tagore, Shankar Pillai, RK Laxman, Rajendra Puri, OV Vijayan, Abraham, Sudhir Tailing, Manjul, Surender and Satish Acharya robustly represent this tradition in India with global competence. Bal Thackeray and Cho were both cartoonists who later became politicians. Indian Cartoonists considered it their duty to irritate institutions. To borrow the phrase of the brilliant American cartoonist Herblock, these cartoonists routinely “afflicted the comforted and comforted the afflicted.” Likeness and exaggeration are turned into a mirror to expose irony. They shocked us out of the mundane and the routinised through irony and humour.

Legal Standard for Cartoons in India

The general standard for defamation of public officials is in itself very high, and unless an opinion was said or written with evident malice or a thing purporting to be a fact was stated with reckless disregard for truth, it did not amount to defamation of public figures. This test from the American judgment in Hustler (Sullivan extended to parody) has been repeatedly cited by the Supreme Court in R. Rajagopal, Shreya Singhal, emphasising the inherent subjectivity of “outrageousness”. Party officials may never like anything said or done about their leader. That, however, cannot be the standard to assess cartoons. The learned Kaul J. then, in the Delhi High Court, in Khushwant Singh, enunciated the need for public figures to be thick-skinned to criticism about their public functions and even private life. Political leadership in a democracy is subject to even vitriolic criticism and must take it in stride to make necessary course corrections. A Cartoon about the Prime Minister’s public functions, like the cartoon-video in dispute, is immune at this level itself.

Cartoons are a special form of satire because they leave a lot more to the reader’s imagination. The Indian Press Council Norms acknowledge that cartoons must be treated liberally in a special category and have more leeway compared to other satire and parody when assessing press conduct. In Yorty v Chandler, the California Court of Appeals was adjudicating on an allegedly defamatory cartoon against the mayor, dismissing the appeal, safeguarding the right of artists to exercise hyperbole for rhetorical purposes under the First Amendment. The court opined that: “The genius of a well-conceived political cartoon lies in its ability to communicate in graphic form a statement of editorial opinion which might otherwise require paragraphs of written material to express. To say so much with so little, the political cartoonist makes extensive use of symbolism, caricature, exaggeration, extravagance, fancy, and make-believe.” Cartoonists combine description with a leap of imagination to expose the irony. Reality, authority and aura yield to imagination in cartoons. Exaggeration in character or in narrative is both liberties of the cartoonist as well as a right of the audience. The exaggerations in the disputed cartoon-video were all for humorous effect and are constitutionally firm.

A cartoon is seldom drawn by the cartoonists with the intention to make the reader believe that what is drawn is the truth. There lies an opinion underlying it, expressed with a creative liberty to exaggerate the fact sought to be conveyed. The Delhi High Court too concurred in Ajay Gautam, noting: “Lies made in the context of satire and imaginative expression are not really lies at all and perhaps not even statements of fact because no reasonable listener could actually believe them to be stating actual facts.” A cartoonist could even go beyond the bounds of good taste and conventional manners. The disputed cartoon video, however, only asserted facts that form a part of the public record.

The law always envisages a reasonable person and a responsible context-sensitive reader, and not a touchy and hyper-sensitive individual. In Jothisaroop, the Madras High Court wrote of the cartoonist, “the art of the cartoonist is often not reasoned or evenhanded, but slashing and one-sided. One cartoonist expressed the nature of the art in these words: The political cartoon is a weapon of attack, of scorn and ridicule and satire; it is least effective when it tries to pat some politician on the back. It is usually as welcome as a bee sting and is always controversial in some quarters. In the very nature of things, a cartoonist is entitled to a greater latitude.” The Bombay High Court, too, quashing the sedition case against Aseem Trivedi (Sanskar Marathe 2015), the cartoonist, re-emphasised that cartoons without any incitement to violence could not be said to be disturbing national security or causing disaffection against the state.

Concluding

The Prime Minister’s cartoon video that was taken down said nothing objectionable and stated all things that were a matter of public record with hyperbole and exaggeration for humour. It may have dented his apparent authority and punctured the narrative of mettle and gallantry. That, however, is the day job of a cartoonist. There is no merit in the argument that this restraint was in the interest of security, defence or foreign relations. Shaping a democratic citizenry needs careful political restraint and moderation. Constitutionally, the right of cartoonists and satirists is structured to safeguard and maximise the possibilities of expression for cartoonists and satirists. Political satire is a carefully cultivated political entitlement that the Indian people have received as a timeless heritage. Gag orders issued against cartoons without hearing and citing an emergency have a chilling effect on the possibilities of humorous expression. There are growing concerns about repeated acts of digital censorship. The PMO may do well to take a page from this illustrious Indian tradition of satire and cartoons and join the political culture that laughs off adverse humour to say: “don’t spare me”.

References:

1. Amul runs a series of cartoons from 1966 to today. RK Laxman cartooned in the Times of India for fifty years. India today ran a series “So Sorry” for eleven years. Shankar’s weekly featured cartoons for 27 years. Manorama, Anand Bazaar Patrika, Loksatta, and Dinakaran have all continued to publish satire and cartoons in the vernacular.

3. India has also had a tradition of published volumes of political cartoons. Here is one on Ambedkar, Nehru, Gandhi and cartoons by RK Laxman (here for his many volumes), Rajendra Puri. Here was the life of Nehru in a video made as a collection of Shankar Cartoons.

4. By Rajendra Puri:

   

5. Surender on Mamta:

   

6. Abu Abraham on the President’s office during the Emergency

   

(This short article is to remember him on his fifteenth death anniversary.)

“I am Sisyphus. I keep rolling the boulder uphill.” He said with a characteristic chortle and twinkle in his eyes in one of his interviews.

How does one imagine law for human rights? Kannabiran’s life had that task cut for it. In anxious polities that espouse an urgent desperation for securing political order by any means, being a civil liberties lawyer is the curse of Sisyphus. For anyone who imagines an order different from the state version, that imagination comes at a great cost. Belief in such an order is condemned. Association with such a cause is unlawful. Wielding force to challenge the order is an invitation to the ruthless wrath of state violence. The human-citizen nexus snaps right there. Kanna sought to dwell in that snap, nurse the wounds and nurture a reconciliation. He did this as a lawyer activist. How does one respond to that violence through law? How does one situate the human spirit in law to wield it for resistance? Kannabiran leaves some answers for me, for us.

Liberal order is a transcendent ideal, the idea that all humans carry within them the spark that seeks and deserves freedom. It exists as an abstract ideal that must be stealthily and jealously guarded. However, for historically mangled polities, liberties are often a top dressing on deeply illiberal and unequal soil. Liberal order is then a disappointing phantom, a ghost. It is challenging to resist mass disillusionment in the liberal order without suppressing it. Any ambitious liberal order must contend with its biggest paradox. How does the liberal state treat those who do not have faith in the liberal state for independent rational reasons, including often to guard their own liberties? In its historical-political form, where masses have been excluded from property, prosperity and dignity, this question is accentuated. That tension puts most liberal thought into an animated suspension. This is Kanna’s, as any other human rights practitioner’s, serious dilemma. How to wield liberal legality to undo the unequal conditions and illiberal practices? Kanna made this tension generative and weaved a human-rights practice around it in times when the Indian State turned to aggressive violence to secure order. Kanna had two instincts that he had to balance. He wanted to believe in the liberal order and use it for resistance, but also wanted the law to upend the existing conditions of deprivation and indignity in which this order survived. These tensions, whose answers are unknowable in theory, must be grappled with through experience and practical judgment, and so he did.

To Kannabiran, if the question of the rule of law is suffixed with “of whom”, the idea loses its meaning. Constitutional Governance then folds into government impunity. The rule of law was the gift of the bourgeois system, and he believed in it. However, at the same time, he sought to make the law a site for insurgent jurisprudence. Uncovering a transformative vision in the text that would embarrass a conservative judge. “Unless courts are counter-hegemonic, justice can never be done... Justice and rule of law in the caste society are partisan by definition”, he would say. How do we imagine a liberal judge who upholds the rule of law but at the same time seeks to transform political conditions?

He had at least two means of resolving this tension. First, by emphasising that no matter what it is faced with, the state must hold itself to the rationality embedded in the legal procedure. And second, this rationality must also pave the way in substance to accommodate the human predicament. The second was an attempt to re-situate the people and their human instincts back into the law. He would emphasise that the “consent” in the Lockean social contract was not permanent and unconditional. He embedded both procedure and substance into moral empathy guided by constitutional morality. Moral culpability then had to factor in a range of human experiences and subjectivities and guide our intuition of law.

He bridged these with what appears to be a moral ideal of truth. Of the kind Gandhi and Ambedkar invoked. An idea that rose above politics and law. The idea that guided our sense of fair and unfair and just and unjust. The idea that spoke to the “humanness” of experience. Kanna sought to have human feelings to bear on the law. Thus, when arguing for communist insurgents, he read out to the judge passages from the Communist Manifesto. The legal system, to him, was running on the judges’ and lawyers’ willingness to educate themselves about the human condition. He argued that “while communists share a sense of urgency for revolution, it is never meant literally.” In another case, he sought to argue that a death sentence must not be granted to political assassins: “where people act out of genuine and passionate motives according to their conscience, and not for their own benefit, they do not merit extreme punishment.” In courtrooms, he was not afraid to experiment— demonstrating that spiritual powers are sham in court, in the Premananda case or recital of impugned anti-state poetry in the High court to defend the right to speech of Virasam poets—he brought judges to lean into these experiences.

One of his most important insistences was that we must take the constitution to the trial courts. The taluk court would hear us for two to three days, a luxury unavailable in higher courts, he would say. Over time, we would have enough judges in the taluk judiciary who can take constitutional arguments about criminal law seriously. On one occasion, Kanna asked a TADA Court sessions judge if he was willing to resign for having said that the Constitution were not the concern of subordinate courts. When threatened with contempt, he ended up engaging for an hour with the relation between the constitution and criminal law in the court.

To him, human-ness was the core of legal validity. Civil rights were rights inherent in every person. Any ruler, state government or constitution only confirmed, respected and guaranteed the protection of inherent rights of persons. It was membership of the political society that, by itself, conferred self-respect and dignity— not the law, which was tasked only with securing them. Justice, as per the constitutional value system, in his view, was not just about all institutions under the constitution in their relationship with the people, but also a “moderating force of all human relationships.” Peace was the collective right of all people.

Preventing impunity, legitimate power, and law were to be spoken of in the same breath or not at all. The movement for human rights was a struggle against misrule and unconstitutional governance. Of impunity, he wrote:

“Impunity is never the answer. This sanction of impunity throws into question the legitimacy of governance and order and points to decay in the system. It is a matter that calls for a national debate. Unless human rights becomes part of political activity, unless human rights discourse forms part of the substrata of our political arrangements, we will have no road to civilised governance.”

Speaking Constitution

Kanna was also a death sentence abolitionist. He observed that in conferring death sentences, the rule of law operated in a paranoid state. Death sentences were antithetical to the premise of the rule of law. He would argue that society lacked the collective moral competence to put anyone to death. If premeditation made an offence more serious in criminal law, the death sentence was a collective premeditation by the entire political society to end a life. Borrowing a leaf from Camus, he urged:

Capital Punishment is the most premeditated of murders to which no criminal deed however calculated can be compared. Public premediation known to a future victim is a source of moral suffering more terrible than death.

A believer of civil liberties, who opts into law as their means of contending the meaning of ‘order,’ does not have at their disposal the primary means of tweaking order: namely, force. What they have at their disposal are values, rhetoric, public reason, and faith in one’s conviction. Kannabiran engaged with the most urgent questions of order in this manner: characterising encounters as murders, resisting tribal oppression, entering appearance for encountered naxals, defending free speech of revolutionary poets, challenging the emergency, terror and state of exception, contesting death sentences, resisting genocides, abhorring closed in-prison trials, delineating the relation between conspiracy and right to association, critiquing federal control of violence and all things involving the state, freedom, dignity and the human condition. He fused criminal law, philosophy and history and human rights practice with astute brilliance.

Of all Kanna stories, my favourite is the one when he was appearing for a Naxalite in the High Court. The judge asked: Mr Kannabiran, why should Naxalites who do not believe in the constitution take shelter under it? Kanna was prompt, like this question formed the spine of his moral personality: “When such issues come before the court, it is your values and not their values that are on trial. It is the values of the constitution and the values of the state that are under test.” To him, the faith in one’s own conviction means that we must accept the rational consequences of that conviction, even for people who don’t accept its premise.

As a question of political judgment, it is very difficult to locate Kannabiran on any spectrum that asks how much violence was justified against violence. He perhaps did not believe in any arithmetic. He resisted violence by impressing the necessity of dialogue. “In stating a perspective, the object is never to support or condemn different sides or even to take sides”, he said. This Gandhian strain is characteristic of his engagement with the law and provided him with sufficiently diffuse moral courage and strength without being forced to pick sides. That made Kanna the natural choice to negotiate with the Naxals when they kidnapped a group of bureaucrats. He lamented that “Indian Politics has not produced any leader in the last fifty years with sufficient moral stature to intervene and prevent incidents of acute violence.” He unknowingly embodied the qualities of such leadership.

Kannabiran did not deny briefs from anyone. Many times, the accused would just name him as their advocate before the court, and he would enter an appearance for them. Sometimes he got paid, but mostly he did not. Kanna led and participated in committees for fact-finding on encounters and state violence. These, he believed, presented alternate avenues for uncovering truth and forging a new politics of state-violence. These avenues would provide people with a claim to ‘truth’ and moral courage. He fought that battle for three decades until the Indian Courts finally recognised that encounters had to be registered and investigated as murders.

A lot of advocacy hinges on knowing when to stay silent and when to speak. Kanna himself would acknowledge that the legal profession imposes a duality on its practitioners. They must inhabit two moral worlds. One of their client and the second of their own. The permeability of one world into another is one of the most difficult parts of being a lawyer. He intervened, often driven by a personal moral conviction, to remind the profession to reflect. A few instances are worth highlighting. When the bar abandoned Afzal Guru and his co-accused and denied them representation, he condemned this in a letter in unequivocal terms. Barring advocates from representing clients to him was an uncivilised and communal method of functioning. On another occasion, when a Sikh accused in Karnataka, presented before the High Court, stated that he had written to the Punjab Government for protection, the court broke into laughter. Kanna intervened to soberly remind the court that he had to write to the Punjab government because he lacked faith in the Karnataka Government due to its communal intentions. That to him was a cause for introspection.

While inhabiting this dual moral world in a politically charged climate, coupled with state impunity and the fact that most of his clients were Naxals, at least some of whom would refuse to be represented before bourgeois courts, his political predicament must have been a walk on thin ice. Yet he was cautious to note that progressive politics came at a cost: namely, to exercise the duty of care to ensure we do not act in a manner prejudicial to progressive politics. He was surveilled by the state, threatened with violence against himself and his family. Yet he continued to impress himself and his politics on the world in the shade of law. Kanna could call a spade a spade. Kanna attacked most politico-legal moments of importance without mincing words or without any partisanship. The Emergency, the Mandir movement, the Gujarat 2003 genocide, the Mumbai 1993 genocide, the violence of the Naxal movement, the Sikh genocide of 1984, the Niyogi Murder and the acquittal of only the industrialists, likening the PoTA to the Rowlatt Act and likening the death penalty to state-sanctioned murder; he expressed what he felt and acted on it.

Like legal outlooks, Kanna also inhabited different writing styles. He could write a first-person letter from the perspective of Sanjay Dutt and equally well an exceptional genealogy of civil liberties in India. His references were wide-ranging. For instance, when arguing the parliament attacks case, he argued that no attack on any building could constitute “waging war against the state”. To buttress his case, he relied on the case of the burning of the German Reichstag. Camus, Kundera, Laski, American writing from the civil liberties movement, international human rights movement and laws and legal theories all formed a part of his repertoire. Some days, he was at his polemical best:

Criticism of the government or participation in protest will lead to prosecution for sedition and other offences against the state, or even arrest under preventive detention or a more regressive law. Criticism of Parliament while it is in session invites contempt for breach of privilege. Speaking or arguing loudly in a court invites contempt. And yet, a corrupt and callous bureaucracy cannot be called to account because the government of which they are the key players must permit prosecution.

Ultimately, it is these various forces that have ganged up to put an end to the Constitution, with nobody even prepared to lament its demise. What we as citizens have really been guaranteed is the fundamental right to be spectators, and to be taxed directly and indirectly for witnessing this entertainment.

Wages of Impunity

He said: I am sure even Sisyphus must have dreamt that he would roll the stone to the hilltop someday, and I, too, believe that. He did believe in chipping away at state oppression, one victory at a time. In his life and work, we find the inspiration to keep chipping away. One victory at a time. His extraordinary life, even in its mundane elements, continues to inspire us.

“When people turn sixty, they retire, turn to the scriptures, go out only to attend religious gatherings and then return home. There are no problems or tensions that way. But when you have chosen my kind of life, it is very difficult to retire. I keep thinking of retiring, but I am not able to. I do a lot of writing which I never used to find the time for. I sit at the computer and type up my articles using one finger. I do everything the difficult way; that is my style.”

Resources:

1. Kannabiran Memorial Lectures: Upendra Baxi, Nitya Ramakrishnan, BB Mohan, Chandru J, B Nalin Kumar

2. Wages of Impunity, K. G. Kannabiran; selected writings.

3. Speaking Constitution, K.G. Kannabiran; his oral memoir. Review

4. The Advocate — Documentary Film

5. Friend of the Court Podcast — Episode 3, K G Kannabiran

6. Kannabiran in the EPW on Encounters (1, 2, 3), Unlawful banning of PWG (1, 2), Selection of Judges, K G Balagopal, Institutional Decay, Preventive Detention, Repeal of PoTA

7. Tributes: A Collosus of Human Rights , The Insurgent Jurisprudent, Twilight of Human Rights in India

The Jane Street Interim Order on manipulation of stock prices is slotted for appeal on the 9th of September 2025. What is “manipulation of price”, however? Can we legally define manipulation satisfactorily? What is an “artificial price” as against a “natural price” or a “market price”? What are the legal lines? In this article, I examine some of these questions in the context of Indian law on manipulation. In light of the law discussed, I briefly review the merits of SEBI’s case against Jane Street. I leave out the case for blatant misinformation, like a promoter of the company misrepresenting prospects or front-running by virtue of insider training and so forth, to focus solely on the manipulation of price through trading activity alone.

Summary

This article examines the legal framework governing stock price manipulation in India, focusing on the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003. With the Jane Street interim order appeal scheduled for September 9, 2025, the paper delves into the core definitional challenge of distinguishing an "artificial price" from a legitimate "market price." Through a thematic analysis of key precedents from the Securities Appellate Tribunal (SAT) and the Supreme Court of India, the article identifies the evolving legal tests for manipulation, including those related to intent, trading patterns, and unilateral schemes. These established principles are then applied to the facts of the Jane Street case, which involves a complex, cross-market strategy. The analysis concludes that SEBI has a formidable legal case, and the appeal's outcome will be a landmark decision for the regulation of sophisticated, quantitative trading strategies in Indian capital markets.

Table of Contents

I. Introduction

II. Statutory scheme

III. What is “Manipulation” of Scrip Prices?

IV. Some Economic Thinking on “Price”

V. Manipulation continued

VI. Tentative Facts entering the Determination of Manipulation

VII. Intention of the Party to Manipulate Price

VIII. Indian Case Law

IX. Jane Street Group Interim Order

X. Legal Position qua Jane Street Allegations

II. Statutory scheme

S. 3 and S. 4 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003^[1] (PFTUPR for short) govern “manipulative, fraudulent and unfair” trade practices in the securities market. The definitions in these regulations, as in most PFUTP regulations elsewhere, are wide and vague.

For instance, consider S. 3(d): This provision prohibits as manipulative, “any direct or indirect practice or course of business that operates as fraud or deceit in the issue, dealing in or trading of securities listed or proposed to be listed”. SEBI exercises abundant discretion in determining whether an instance or act was manipulative or deceitful.

Further, the definition of Fraud [see below] in the regulations is widened in scope substantially as against the traditional understanding of Fraud. Fraud in PFUTP includes misrepresentation and even silence qua material facts. Intention requirements in Fraud, to either defraud or to make gains or to avoid losses, are relaxed substantially, too, as we shall see in the sections that follow. In dealing with securities in India, the duty imposed on persons dealing with securities therefore approaches a very high standard akin to utmost good faith. The regulations sanction almost all acts or omissions in the disclosure of information and fidelity of transactions through widely drafted language.

Definition of fraud:

Further, S. 4 dealing with fraud and manipulation is wide and exhaustive. In 4(2) it includes multiple acts deemed to be fraudulent or manipulative. These include any manipulative dealing or fraudulent practice in subscription, artificial manipulation of price, manipulation of benchmark pricing, knowingly spreading misinformation, reckless propaganda, sham transactions without intention to alter ownership, counterfeiting, misuse of funds, circular and wash transactions, churning, forgery, front-running, mis-selling and CIS (Collective Investment Schemes). This is in addition to fraud as defined above. The line between fraud and any other manipulative practice is blurred by using them conjunctively.

The origin of manipulation laws was in fraud^[2] because the number of participants in the markets used to be few, and, resultantly, instances of manipulation were also lower. Further, without a digital ledger, a non-fraudulent manipulation of prices was difficult to track. The Indian PFUTP Regulations merge the original doctrinal adherence to fraud with some specific aspects of misinformation to create a wide and hybrid statutory scheme within the umbrella of Fraud and Manipulation without addressing the complications about “ingredients”, “intention” and “standard of proof” requirements as we shall see. The definitions of fraud in the Indian Regulations, for instance, are wider than the SEC’s Code of Federal Regulations^[5] definitions: Mere suggestions of fact which are not held in bona fide belief are also included as Fraud. The definition is also wider than definitions in the British Fraud Act^[6], where intention to benefit is crucial in all circumstances. The law on securities market abuse has now become much more sophisticated. For instance, the FCA Market Abuse regulations (see the detailed regulations here), transactional specifications of certain prohibited categories of transactions are enumerated in detail^[3]. Likewise, in the SEC Code for Federal Regulation, the specific defences against insider trading are expressly codified^[4]. When defining fraud in PFTUPR likewise, any “general comment on trends in the securities market”, “criticisms of economic policy” are saved from the definition of Fraud. However, the boundary between a general comment and specific information that can amount to fraud is Indian law is unclear too. Further, because the relation between Fraud and Manipulation is unclear, we do not know if these defences are also available for “manipulation” as against Fraud. PFTUPR makes for a poorly-drafted blanket regulation where all the offending acts are covered in three sections flat. In parts that follow, I only focus on manipulation of scrip price, focusing mostly on “unilateral” manipulations as against collusions.

III. What is Manipulation of Scrip Prices?

Intrinsic valuation by market participants, speculation following from their expectations, opportunism in arbitrage from differing valuations, hedging against risk, inertia from market “trends”, buyers and sellers at a given price and institutional factors shaping all of these are all bundled up into the one number we call price. If that is the case, which elements belong to the “market”, “intrinsic” or “artificial” price? A definitive answer does not exist. Remember that these concepts are only devised to clarify the distinctions between artificial price and other prices.

Let's simplify the idea of a "price" by comparing it to a house for sale. The core challenge for regulators is telling the difference between a normal market price and a fake, artificial one.

• The "Intrinsic Price" is what the house is truly worth based on its size, location, and condition. It's the fundamental value.

• The "Market Price" is what people are actually paying for it this week. This price includes all the market buzz, excitement, and fear. This is what I have elsewhere referred to alternately as the “true” market price.

• An "Artificial Price" is a fake price. Imagine the seller secretly paid his friends to start a bidding war to trick a real buyer into overpaying. That new, inflated price isn't real; it's the result of manipulation. This is also seen and found only through the market, but it is not the “true” market price. It is not the “true” market price in the sense that it comes into being to fraud, deception, illusions which cannot be explained through rational expectations of rational participants formed based on rational assessments of the price. It’s artificiality is an artefact of its incoherence with value, expectations and rationality.

[One may see this post by Samruddha for a theoretical discussion on the various facets of price.]

Roughly speaking, intrinsic price responds only to changes in intrinsic valuation, Market price responds also to expectations and speculation, arbitrage and “emerging” market trends. Artificial price is the price that results from manipulation. Let’s start with that first.

In Jagruti Securities, the SAT determined what constitutes an “artificial price” thus:

“It is axiomatic that a genuine trade will always reflect a genuine price of the scrip…..

We may like to add that the price time priority signifies two things; first is the matching of price and second is the priority in point of time. When a buy order is placed on the system, it will be matched with the best sell order (lowest price) available on the system subject to the condition that no buyer will be made to buy at a price more than what he has offered.... (and vice versa)

If more than one pending buy orders match the sell order, the buy order placed earlier in point of time will be matched first. This is how the price discovery mechanism of the system works as it is based on the free inter play of the forces of demand and supply. The price which the system determines is truly the price which a willing buyer would pay to a willing seller. Once the system has determined the price of a scrip in the aforesaid manner, it can never be described as artificial.

Artificial price, on the other hand, is a price determined by the buyer and the seller in a premeditated manner through collusion by manipulating the system of which we have seen many instances. Black's Law Dictionary (eight edition) defines the word 'artificial' as "Made or produced by a human or human intervention rather than by nature". If we substitute the word 'trading system' for 'nature' in this definition, it becomes clear that an artificial trade/price is the one that is executed or determined by human manipulation rather than through the operation of the system. As at present advised, we are of the view that in an artificial trade there has to be collusion between the buyer and the seller and in the absence of any collusion, the trade cannot be termed as 'artificial'.”

We will have to wrestle with this idea called manipulation to understand what is an artificial price. Is it really that collusion is the only way to manipulate price? No statute defines the manipulation of price.

IV. Some Economic Thinking on Price

The concept of price does not have a concrete meaning and boundary unless we subscribe to a particular theory about how markets function. If the market is efficient, it can value all the information correctly over time, including information about certain deception, fraud and “artificial” manipulation by some participants. The participants just find out and then correct the market by changing their supply and demand. But what about the money that is lost in the interim? The view of the law, however, is closer to mandating (burdening all participants with) “good faith”. It prohibits misinformation, manipulation and fraud. It affords protection to traders if someone created an image that was not the true picture. But is it necessary for them to have believed that image? Is economic loss necessary? We shall see later.

For now, let’s turn to manipulation. Where is the regulator’s bright line on what is manipulative conduct and what is not? No statute defines what constitutes manipulation except by juxtaposing it with fraud.

Secondary markets in scrips thrive on the principle that markets aggregate available information and affect the supply and demand for particular scrips. Through an equilibrium between quantities of supply and demand price is determined. This equilibrium quantity, in fact, arises out of a stable disequilibrium between expectations of buyers and sellers. When sellers don’t want to reduce the offer price and buyers are unwilling to pay a higher price, they don’t concur about changing the price any further, and we arrive at the “market price”. Actionable disagreements of market participants about the price end have subsided for the time being.

All market participants, in addition to their “current valuation” of the scrip, also form expectations about the future movement of the price based on what they deem to occur to the company’s prospects. Speculation, hedging and arbitrage are therefore a usual and necessary part of bearing and dispersing risk in a particular scrip market. By themselves, they do not fall foul of “fair market behaviour.” On a true shared assessment of all its facets, including future prospects, by all the players, we can thus arrive at a “true” market price.

Participants, especially speculators, hedgers and arbitrageurs, make a living by exploiting information gaps in other market participants’ trades and strategising around them. They are under no duty to disclose information they possess. The line between using ignorance and abusing the ignorance of other participants is extremely subjective and thin, and therefore doctrinally difficult to pinpoint. Markets are inevitably unfair to most participants, and avoiding their conflation with an unfair practice by a particular participant is a hair-splitting exercise. When is reliance by market participants on a particular occurrence in a market to alter their trades “unreasonable”, is difficult, too. The market regulator may also have to consider the difference in portfolio size, trading experience and methodological sophistication available to the average trader in making these determinations^[9]. Determination of reasonable behaviour for both the alleged defendant and the plaintiffs is based on subjective standards.

One may argue that any “unjustified” or “unreasonable” intentional deviation by a market-player that misleads the market, induces a wrong picture of this “true” price, moves the market away from this true market price to some other market price or prevents return to this “true” market price is manipulative. What even is a “true” market price, now? A market price is a market price, no? As long as the aggrieved participant had all the “public” information at their disposal and they made their own assessments, like the rest of the market, they bear the consequences. What do other participants have to do with it if the aggrieved participants’ assessments went awry?

Note that a “true” market price may be different from the intrinsic price we discussed. True price includes the right kind of speculation, arbitrage, etc. What it excludes is only a change in price that market players have been misled into. It is difficult to guess when the “true” market price and market price coincide and when they do not. What do I mean? Let’s take the dynamic case to understand.

The price of shares is dynamic and changes with time as new information is available about that share or the rest of the market. Not just expectations, intrinsic value may also change as information is discovered. The cash market and the futures market both depend on each other, but that is not necessary. This also means there is no empirical measure of “true” market price or natural price. Like I said earlier, these are conjectural concepts. All we see before us is the market price.

Price is essentially a collection of subjective assessments. What are the proxies of this “true” market price, then? How can I remove all the “noise”?

1. One way is by remodelling the market and not considering some trades at all to see what the price would have been had those trades not been entered into. But even then, we can’t say for sure if other market participants would have reacted very differently if they had this remodelled information.

2. Another proxy, for example, is a deflated price averaged over a long period of time. It is assumed that other noisy factors affecting the true market price— the true intrinsic value—average out in the long run. Economists also apply HP filters to get rid of trends and cyclical movements around the “true” market price (they call it detrended averages).

3. One may also compare the price of this share with the weighted index of prices of other shares in the same sector.

These all may be reasonably good at predicting price changes over a period of time, but are poor proxies of “true” market price at a given point in time. Further, when the market is in a churn, people’s subjective assessment of “intrinsic value” of a thing becomes volatile—they change very fast over a short period of time. “True” market price also becomes volatile alongside “market price” and both are indistinguishable in an extremely liquid market with thousands of buyers and sellers.

Finally, what is the difference between spreading misinformation about a share spread directly and dispersing the misinformation through the market by “manipulating” the market? Is it anything more than the mode of act and therefore the mode of proof? Does it also include the fact that information coming to members “through the market” is more legitimate and that the participants are likelier to rely on it? Should standards for manipulation through the market be lower or higher if it is an effect-based determination? (See footnote 9 below) Are legitimate/ reasonable market practices and manipulation are both to a large extent effect-based, or are they still intention-centric standards? Think about it.

Summarily, the following things emerge from our discussion thus far:

1. Information is critical to the market process. Information is proprietary, and using information and inferences for one’s own profit is at the heart of markets.

2. Subjective expectations cannot be aggregated into a “true” market price at a point in time ever all we have are the market prices we see.

3. Observational equivalence or identification problem means that at any given time, there will always exist more than one causal explanation for market price changes.

4. One, therefore, can’t empirically tell what the “true” market price at a point is except conjecturally. Which is why there are legal arguments on why something is manipulation or it is not.

5. Whether the intention of the participant was to manipulate or merely exploit market information to his benefit becomes crucial but can only be determined through inductive inference. Not deductively by looking at the Price Data alone. Intention will have to be imputed by looking at the price data alongside the relevant facts— trade pattern, party involved, etc.

6. Inducement of a false belief about the “true” market price through unwarranted trades and adverse effect on participants may be necessary.

   ---

V. Manipulation continued

Manipulation is therefore defined from the point of view of the actions undertaken by an alleged manipulator. What is unreasonable and otherwise without “legitimate reason” depends on practices that have to be factually ascertained. There is a paradox at play here: One can only infer intention from facts surrounding trades entered and market outcomes. However, we can never be scientifically (>95%) sure of the intention from the facts alone. The law thus assesses claims on the manipulation of a “balance of probabilities”. In light of facts and circumstances.

Manipulative practice is defined in the literature^[7] as “profitable trades made with "bad" intent - in other words, trades that meet the following conditions: (I) the trading is intended to move prices in a certain direction; (2) the trader has no belief that the prices would move in this direction but for the trade; and (3) the resulting profit comes solely from the trader's ability to move prices and not from his possession of valuable information.”

What modes of manipulation exist?

The convergence of prices can be unilaterally disrupted in a manipulative fashion by a participant in five important ways: 1) information-based manipulation, 2) trade-related manipulation, 3) cross-market or structural manipulation, 4) market infrastructure and order-placement related manipulation, and 5) multi-player manipulation, aka collusion. Information-based manipulation is simpler to understand. Front-running or insider trading are examples from this category. Order-placement-related manipulation relates to HFTs, etc. I will exclude these in this article.

Let us focus only on trading-related manipulation in 2 and 3. That is manipulation entirely through trades, since that is the case in Jane Street. These unilateral transactions may fall entirely outside the original doctrinal understanding of fraud. A series of transactions is entered into by a participant, and the market relies on the appearance created by these transactions. The line between a permissible transaction and a manipulative one in these cases is thin. Knowledge, purpose and intention of the party in executing the transaction are all the difference between it being a permissible transaction -- entered in merely to stabilise the market^[8], regular short-selling, parallel market trades and so forth -- as against a manipulative act. If a transaction is not legally permissible or economically viable, it may often be a finding in favour of manipulation. However, a legally permissible and economically viable transaction by itself does not make it a valid transaction.

In determining these categories of viability and permissibility and the impact of such transactions on the market at large, an account of reasonable market practice is necessary. Often, a transaction may be justifiable as a fair transaction, and in other circumstances, the same transaction may be deemed manipulative. A transaction may even be deviant from a “usual” transaction; in fact, that is what the market rewards, considering the circumstances.

VI. Tentative Facts entering the determination of manipulation

While it is difficult to produce an exhaustive list, a transaction may be manipulative if some or all of the following hold; in any case, these determinations become crucial. The FCA market abuse regulations usefully codify some of these:

1) Any accompanying facts about direct information spread by the participant along with their trading activity.

2) Actual evidence of windfall profits or avoided loss^[10], marking the start^[11] or close or layering of transactions, proximity of time in buy-sell transactions^[12].

3) That without the impugned transactions, it would have been unreasonable for the other market players to act the way they did.

4) Role of the concerned player in the market.^[13]

5) Any subset of the transactions could not have led to standalone profits in the ordinary course.

6) If it were a futures transaction, it was singularly and purely speculative and the attending circumstances in the market. LTP of the scrip is relevant^[14], so is delivery and losses.

7) Whether there was an impact on the Market (This is, however, rejected as not a necessary factor by the SC in Rakhi Trading^[15])

8) Trading at a particular time of the day or repeated arbitrage in a similar transaction and repeated large-volume transactions, volume of liquidity in the trading market by themselves are not manipulative but may create a presumption of manipulation.

9) Derivative contracts in related sector-holdings are affected by volumes in 8).

10) Synchronisation of trades is not per se illegal but may be manipulative in light of other circumstantial evidence.

The courts have to consider the totality of the circumstances in arriving at an inference about whether a particular act is manipulative or fraudulent. That generates plenty of scope for arguments, and it is difficult to reduce this law to doctrinal sophistication. However, we may derive some guidance from decided case laws.

VII. Intention of the Party to Manipulate Price

Some authors argue that without the intention to manipulate the market, there cannot be a satisfactory definition of manipulation at all^[16]. Following the doctrinal reliance on fraud, and given that the determination is entirely circumstantial, intention and knowledge play a crucial role in market abuse claims. Intention is a state of mind and can only be inferred from facts. Consider then the two statements below:

1. Is there enough evidence to infer that the person “actually intended” to manipulate the price?

2. Is there enough evidence to infer that the person manipulated the market?

Both are to be determined based on the same factual matrix. The question really becomes “was there a design”, or was the price movement “justified otherwise and therefore for a different intention”? But if it was justified otherwise, can we even say that the price was manipulated to begin with? We cannot. Can there even be a uniform standard for these across cash, futures, and options markets across share categories? There cannot be.

Another way to contrast the two statements above is to ask if “there was a design plan” as against “merely accidental” movement of price. But what is the difference between a “merely accidental” movement of price as against “creating a false impression for the market”?

Summarily, is the standard of intention malice — intention to cause the harm that was caused, intention to cause the act that led to harm, recklessness—not taking enough care to ensure that the act that caused harm did not happen, or negligently ignoring knowledge that the acts were likely to manipulate price? All these are standards of intention. Remember that the determination is entirely on facts and on the balance of probabilities.

Is harm—adverse effect on the market— necessary to be proved at all? Can we presume harm if manipulation is established? If harm is not necessary, then is it an “act+intention only” offence? Further, is it necessary to prove that the other traders believed the impressions I had created through my trades to charge me with manipulation?

We enter again the territory of legal determination. Some of these questions are settled, some are not; as we shall see.

The Indian threshold for intention in PFUTPR is very low. It includes reckless propaganda, knowing misinformation, and even knowing or “active” concealment of facts in mis-selling. The standard is also similarly unclear in US law. The law on defence of Scienter and whether deliberate recklessness suffices for a claim of “knowing” fraud, and what standard of recklessness is applicable, is unsettled^[17]. Punishing knowing concealment of a material fact is a high burden that hampers the proprietary right of a trader to validly acquired material information, which he may use for arbitrage. This lack of clarity is because the determination is entirely factual to an extent where a coherent body of law has not taken shape.

Deception in section 2(1)(c)(7), for instance, includes not taking informed consent of participants or their full participation. What would that mean in market trades? Am I disentitled from holding any secret information about a particular share? Am I obliged also to publish my inferences while making trades? Does this apply only to directors of a company whose shares are being traded or to brokers to all blanket to participants? The statute does not clarify.

For the manipulation of benchmark indices, the intention of manipulation or knowing acts is not necessary at all. Even manipulation per se is not necessary, and mere “influence” on the benchmark may be sufficient^[18]. That is a draconian standard.

The standards of intention and sale for derivatives and futures, as against sale in spot cash markets, have not been distinctly demarcated^[19] (the footnote clarifies the position of law), nor are the demarcations of these standards about specific acts of manipulation clear in the statute. This is even when the fundamental motivations of traders in different markets and for different trade designs may be different and may require different threshold standards. It is a jumbled-up regulation.

Let us examine some case law to understand how the courts applied these standards.

VIII. Indian Case Law

Comparator shares and volumes

In Ketan Parekh^[20], to examine whether prices of Lupin Pharma had been artificially elevated, the Securities Exchange Board compared its movement with the price movements of other listed pharma companies. The defendants, however, were of the opinion that the size of Lupin Pharma was relatively small and the pace of expansion higher relative to the comparator companies used by SEBI. The SAT accepted the defendant’s argument. Further, the court also examined the volume of transactions as % of total shareholding in Lupin to bolster the conclusion that the transactions were not manipulative. A small player cannot affect the market price on their own. However, volume was not cross-checked with average liquidity in Lupin trades, as even with a small volume in an illiquid market, trades can create false impressions. This is in sharp contrast to Sebi v Ajmera^[21], where illiquid scrips were an important factor in rejecting the claim of manipulation. Further, volumes also become irrelevant in some cases, as we will see further.

Lack of Inducement

Another argument in Ketan Parekh was that there was no inducement for other traders because of this artificial price rise. The tribunal first sought to establish whether the price rise in Lupin was “caused” by Parekh and related broker companies controlled by him. However, the court held that ‘inducement’ was a necessary consequence of manipulation and need not be established separately from manipulation. The tribunal observed that the law cannot require the board to discharge an impossible burden of tracking inducement across all public participants in the market. Where manipulation is proved, inducement has to be presumed. If the effect on other traders is not necessary, is an adverse effect on the market necessary? When inducement is necessary to demonstrate effect on the market, the SAT has required showing that the market behaviour was because of the acts of the defendants.

Other intervening factors and burden of proof

In Nirmal Bang Securities^[22], the Board had alleged Nirmal Bang of depressing the prices of IT stocks in collusion with some unregistered brokers. However, the SAT held that extant global and national circumstances, like movement in global markets, large selling in the markets, fears of slowdown, financial problems of Ketan Parekh and other such reasons that were leading to a fall in prices had to be considered. If the Board did not admit that the price had fallen because of these factors, SEBI had to prove its version, and mere conjectures would not suffice. The SAT also held that SEBI had to determine “how much of the fall in the price was artificial and how much of it was real and what proportion of the fall can be attributed to a particular person /transaction.”

Correlation and Causation

What the SAT also discussed but failed to apply in its own judgment was that correlation and causation are distinct. In the absence of large volumes of trade, it is difficult to establish an intention to manipulate scrip prices. However, the tribunal held that in the absence of a correlation between the net price of shares and transactions by Nirmal, manipulation could not be established. Here, it is implicit that “showing” adverse impact is necessary and correlation is necessary for causation—both propositions have not been strictly followed by the courts before. Contrast this with the position on adverse impact in Ketan Parekh.

Standard of Proof

The Supreme Court in SEBI v Ajmera^[24] reaffirmed that proof under S. 24 had to be beyond reasonable doubt for offences and mere preponderance or probability for civil liability^[25] to be gathered by looking at various circumstances read together. The courts before this had been cautious and located the standard between preponderance and beyond a reasonable doubt by merely stating that “mere conjectures were insufficient”, but the standard was concretised at a lower threshold of “preponderance or probabilities” in SEBI v Ajmera.

Which transactions are important for adjudication?

In BP Fintrade^[26], the appellant trading company before the SAT, argued that the SEBI had cherry-picked transactions above LTP to make a charge of advance bidding the price. The appellant contended that they had only engaged in momentum trading by taking advantage of the direction of price movement. The volume of trade (10%) was small in an otherwise liquid trade. He contended that trading below the LTP in small volumes did not amount to manipulation ipso facto. There was no evidence on circular trading or collusion, and collusion had not been established^[27]. However, contrary to principles established elsewhere and in light of special facts, the court held that small trades below LTP 166 times over multiple days were placed to “create momentum”. 10% of traded volume was a sufficiently significant volume to infer that the trades were inimical to market interests, and such trades below LTP were irrational market behaviour otherwise. The tribunal held:

“it is also on record that in 124 out of 166 times sell orders were placed in single digits of 1, 2, 3 etc shares, which defies the submission of the appellants that they were placing orders below the LTP because only if sell orders are placed a bit below the LTP large quantities could be sold in a falling market. Therefore, clearly the strategy of trading [momentum trading] adopted by the appellants was creating its own momentum inimical to the interest of the securities market. Even if it affected only about 10 % of the market volume in the scrip of Blue Blends, as contended by the appellants, it is no consolation since influencing 10% of the market by 2 entities is a significant deviation from market equilibrium. Therefore, dehors the connectivity issue itself the appellants are in violation of the PFUTP regulations by the very nature of their trading strategy and trading pattern.”

Here, the problem of endogenous causation is the gravest and is insufficiently addressed.

In Kalpana Chedda^[28] too, the court similarly had held that where large volumes were available for sale to a mother-son duo, selling a small number of shares over a period of time over LTP was not “normal rational expectations” (they mean rational market behaviour). In aggregate, they manipulated the market as top-two net sellers while offloading the shares towards the tail of the transactions at a higher artificially inflated price.

Along similar lines, in Shri Nagad Sarvar v SEBI, the fact that he had executed only buy trades and only sell trades on some days and had also made losses on a few days was relevant in holding that his behaviour did not lead to manipulation of scrip prices. The court held that where the appellant had occasionally gotten beneficial ownership by taking delivery, his parallel buy and sell trades were not matched within short periods, it could not be held to be a wash trade, and it was, in fact was a legitimate transaction. However, the standard was very different in BP Trading, where different trading patterns afforded no relief. There, the court held that”

“A large number of sell orders were placed repeatedly on several trading dates at less than the LTP; it is illogical …. Of course we notice that a number of orders of the appellants were placed on or marginally above LTP, but that is the rational behaviour expected from a seller and no fault can be found for SEBI in not considering such trades as violative of the PFUTP Regulations.

Appellants’ submission of a small list of trades in which they impacted LTP both positively and negatively on a few days also does not help the appellants since the overwhelming evidence is clearly towards placing sell orders below the LTP.”

Collusion

In the Kalpana Chedda case, the SEBI had never analysed the buy-side of the shares, only that the seller had sold them above LTP. Therefore, any evidence of collusion could not have been produced. However, the tribunal did not order a reinvestigation. There was no collusion in Saumil Bhavnagari^[29] either, only the fact that the advance bid often was the first trade of the day, above LTP, which, according to the SAT, was made to influence prices.

These two cases must therefore be distinguished from another line of small-share-selling cases where it was held that to establish manipulation by advancing bids, is to be proven for trades above or below LTP, proving collusion between buyer and seller was necessary. In Nitish Shah HUF^[30], too, the court upheld the proposition that without such collusion, no causal relation between trades and manipulation could be established. In the absence of any relation between the buyer and seller, the mere selling of small quantities around the LTP was not manipulative^[31]. Here, too large buy orders were available when small orders of 25 shares were placed, but that was not considered by the court. Further, the fact that the appellant was trading all other scrips in large quantities, unlike this one, was also not considered. Another question that begs attention is whether collusion is irrelevant where the SEBI has not alleged any collusion, but relevant only where SEBI alleges but fails to prove collusion?

Circuit Limits

One other crucial characteristic in price-manipulation cases considered by the tribunal was the circuit limit^[32], where the court observed that trades within the circuit limit (in the absence of an LTP buy/sell offer that is pending) were permissible and did not lead to an inference of manipulation. This had also been a factor in Jagruti Securities before the AO^[33], but the AO drew an adverse inference of the fact that the trades were close to the upper circuit.

As we can briefly see throughout this discussion, the weight attached to different contributing factors in cases of unilateral manipulation of scrip prices is uncertain and often incoherent. The multiplicity of circumstances with uncertain weight and the use of the preponderance of probabilities as a standard of proof may lead to conflicting guidance. The courts, too, have urged for an advanced and nuanced framework on manipulation^[34]. Indian case law has advanced substantial criteria and considerations for determining manipulation independent of the weight ascribable to them. Let’s apply these standards to the Jane Street Case.

IX. Jane Street Group Interim Order

In the Jane Street matter, all the issues discussed thus far come into sharp contrast. The interplay between the derivate and the cash market, standards for index option trades, close-to-expiry trades, profit and loss patterns, correlation of prices with trading activity, volumes of trade, buying above or below LTP in liquid markets without collusion of any sort, LTP movement, market impact, concurrence of activity, relevant comparison groups, continuing negligence and disregard for regulatory caution, economic rationale, legal permissibility, extended marking of the close, impact on market participants, use of position of self and associated players.

Jane Street purchased heavy volumes of the component shares of BANKNIFTY in the cash market and futures market. Since FPIs cannot execute intra-day trades, Jane Street executed them through its Indian subsidiary. As the prices in the cash market were supported, other participants in the options market followed suit by taking long positions early in the day. Jane Street, however, took short positions early in the day. Towards the end of the day, they closed positions in the cash market at a loss. However, since the options market is much more liquid and had a notional turnover was over 353 times the cash market turnover, the absolute volumes and profits booked in the options market through the crash induced by their sale in the cash market were much higher.

The SEBI interim order, which is a factual order, covers all actors considered hitherto and enunciated above in this post. Since index prices form the “benchmark” for trading in that sector, any act of omission, irrespective of intention, is sufficient to hold that it is a manipulative practice. Further, JS engaged in extended marking the close on 3 days. Extended marking of the closing price is considerably influential in determining manipulation. Jane Street incurred a deliberate loss of 199 crores in the Cash and futures market across 15 days, which is inexplicable otherwise and falls foul of the test in Rakhi Traders. It is unclear whether they made losses in the cash market on all days, as the SEBI interim order does not point to that. This could turn out to be in JS’s favour in the final report. The SEBI has added that almost all changes in price in the cash market were driven by the trades undertaken by the JS Group.

Precise allegation - The 17th January Trades

See the chart here. See the net value of purchases/sales in Cash Market (CM) and Futures Market (FUTSTK). Also see the change in Delta exposure through the day.

Jane Street in the early minutes of 17^th January aggressively pushed the LTP by bidding at LTP or above LTP to counter the substantially negative market sentiment that day. The SEBI estimated JS’s contribution to LTP was as much as double of what the scrip price would have been otherwise. We do not know how SEBI has arrived at that number, but it could be challenged. The note says: “The LTP impact attributable to the rest of the market was computed by adjusting the total price movement (vis-à-vis the respective scrip), for the impact created by Jane Street’s trade.” However, in law, this finding of the precise effect of Jane Street’s contribution to price manipulation is consistent with decided case law.

Jane Street could argue that its move was directed at stabilising the market, given the circumstances, but given other circumstantial evidence, it is unlikely to sustain because the firm also simultaneously acts in the options market. As the market expected the momentum to sustain, call options became expensive and put options became cheaper. JS sold call options, which became expensive, and bought put options that had become cheaper to take a bearish position in the options market. This makes no economic sense unless one has a strong reason to believe that the momentum they have created will not sustain. It could be argued that we tried to sustain the momentum but could not, and therefore resorted to selling our positions. However, the delta exposure was built consistently since the start of the day and the puts were exercised very close to the end of the day, starting at 3:15. (See chart above)

The volumes in the cash market were substantial 15-25% volumes in each bank. (Refer to the report for precise numbers) Further, the options volume cash-equivalent was INR 32,114.96 crores in short positions in BANKNIFTY via index options, in absolute terms, was 7.3 times the INR 4,370.03 crores long position built by the group aggressively in the component cash/ futures markets. Then, in the intra-day market, JS aggressively sold its positions and booked losses in the cash market. However, it profited much more in the options market. This modus operandus was run on 15 days. The impact on both the cash and options markets was substantial, as it amounted to deception of the players to alter “normal” market prices. The fact that it was done through a subsidiary to bypass the FPI intra-day regulations is also significant.

X. Legal Position qua Jane Street Allegations

While I have borrowed individual propositions from particular cases to show how they have been covered, the overall case has to be collectively considering all facts and circumstances. Jane Street may argue that their transactions early in the day were to hedge against other portfolio risks, and they therefore were constrained to sell. They could also argue that their positions in the Futures market were consistent and were reversed on account of some information, including the market trends reversing independently of their activity. Further, they tried to provide support to the index till 11 am to stabilise the market. However, they were unable to support the index and had to reverse their strategy. The coincidence in timing was because of a genuine reversal of strategies.

However, aggressive momentum-support positions in the cash market are exactly opposite and simultaneously taken with short positions in the options market. Both cash and options positions were closed with a reversal of the trading strategy at the end of the day. Taking such positions repeatedly makes no market sense, and they are extremely risky positions for any reasonable trader who knows he cannot influence the market on his own. It is extremely difficult to explain this as a complex arbitrage.

It is unlikely that the defences will survive on the preponderance of probabilities in any case. Further, there are judgments to the effect that if the negligence is continued, standards for intention are relaxed. The fact that the manipulation continued even in the face of notice from SEBI about unjustifiably high delta positions in the options market could be considered continuing negligence. Overall, the SEBI has a strong legal case, consistent with the way law on manipulation has evolved in India, and it is unlikely that Jane Street will succeed in its defence before the SAT on the merits. The case is slotted for hearing today in the SAT and would be definitive in understanding the contours of cross-market trades and standards for options trading.

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^[1] As Amended in 2024

^[2] Regulation of Stock Market Manipulation - Comment, Spitzer et al. Yale Law Journal (1946-47). The history of manipulation law is also detailed in Regulation of Manipulation Under Section 10(b): Security Prices and the Text of the Securities Exchange Act of 1934, Steve Thel, Colombia Business Law Review (1988)

^[3] FCA Market Abuse Regulation 6.6

^[4] SEC CFR on Market Regulation. Also, in 10(b) of the SEC Act, 1934

^[5] 17 CFR 240.10b-5

^[6] Fraud Act, 2006, UK Parliament

^[7] Daniel R. Fischel & David J. Ross, "Should the Law Prohibit 'Manipulation' in Financial Markets?," 105 Harvard Law Review 503 (1991).

^[8] The UK and the USA recognise stabilisation as an 'acceptable' type of market manipulation, whereas the German regime is silent on this point. Lomnicka (2001)

^[9] In the Ketan Parekh case: “Tragically, retail investors and day traders are most vulnerable to such trading as they follow the herd mentality because they lack market intelligence and experience to diagnose such cases, and they are usually the ones left holding the parcel when the music stops. Also, in Nishith HUF v SEBI, “It must not be forgotten that ..may influence the innocent/gullible investors”

^[10] Nobody intentionally trades for a loss. An intentional trading for loss per se is not a genuine dealing in securities in Rakhi Trading

^[11] Saumil Bhavnagari vs Sebi on 21 March 2014, where the proprietor for 85/175 orders placed most orders first in the day, higher than LTP, and claimed that he was positive about the financials of the company. This defence was rejected by SAT even in the absence of any collusion.

^[12] In the US, the size of profits is not relevant

^[13] SEBI has not bothered to distinguish between client sales and proprietary sales in Nirman

^[14] Jagruti Securities holds, “It is axiomatic that a genuine trade will always reflect a genuine price of the share.”

^[15] A position not followed in Shri Nagad Sarvar v SEBI, where the tribunal inter alia held that the board had not demonstrated an adverse effect on the market.

^[16] Fischel and Ross (1991)

^[17] Matrixx Initiatives, Inc., et al. v. Siracusano et al. 563 U.S. 27 (2011) Certiorari to the United States Court of Appeals for the Ninth Circuit No. 09–1156. Argued January 10, 2011—Decided March 22, 2011.

^[19] The Supreme Court rejected such an argument made in Rakhi Trading. This had been the logic of the SAT order where the SAT held: “when Nifty is traded in options contracts, the movement of prices in that segment cannot have any impact on the price discovery system in the cash segment which is one of the allegations” The SAT argued that in the future options contract reversal of contract was to be treated differently from the cash-market because in derivatives the underlying security may not be intended to be transferred at all. The SC, however, rejected this argument.

^[20] Ketan Parekh vs Securities And Exchange Board Of India on 14 July 2006 SAT

^[21] 2016 (6) SCC 368

^[22] Nirmal Bang Securities Pvt. Ltd. vs The Chairman, Securities And Exchange Board on 31 October, 2003 SAT

^[23] Sterlite Industries (India) Ltd. vs Securities And Exchange Board Of India on 22 October, 2001 SAT

^[24] supra n 22

^[25] Reiterated in Rakhi Trading

^[26] Bp Fintrade Pvt. Ltd. vs Sebi, SAT, 20 November 2020

^[27] As in Jayendra Chandulal Sheth SEBI order 2019, also in Moneygrowth v SEBI 2008

^[28] Mrs. Kalpana Dharmesh Chheda vs Sebi on 25 February, 2020 SAT

^[29] Saumil Bhavnagari vs Sebi on 21 March, 2014 SAT

^[30] M/S Nishith M. Shah Huf vs Sebi on 8 January, 2020 SAT

^[31] Reliance was also placed on Jagruti Securities in addition to Ajmera

^[32] In Jagruti Securities, the parties were trading small to avoid the upper circuit.

^[33] Adjudication Order No. AP/AO-20/2005-06, Paragraph 4.15

^[34] Rakhi Trading, Ajmera, Kannaiyalal Patel SC 2014

In what follows, I will traverse the discussions that ensued in the enactment of the Tenth Schedule and three Supreme Court pronouncements thereafter.

Part I - Disabling the Adjudicator

Part II- Why did this come about?

Part III- Parliament becomes the stage

IIIA - Tabling the bill

III-B - Aayaram, Gayaram and Balaram

III-C - Anxieties from the Cow and the Calf

Part IV— What did the Courts decide?

Part V- Summary

Part VI- Restraining executive control

Part I — Disabling the Adjudicator

Under existing Indian law, the speaker continues to hold office as long as they enjoy the support of the majority of legislators in the house. But often, defections relate to changes in majorities and the toppling of governments. In one gameplay, a defecting member can defuse the Tenth schedule and anti-defection law before defecting by issuing a removal notice to the speaker. A notice that he has lost the support of the majority in the house and therefore must face a vote test. A vote-test in which they will vote against the existing speaker and install a new speaker in his place.

In Nabam Rebia, the court held that once a notice for the speaker’s removal is served, he is de jure—by law— disabled from exercising his authority as the speaker. Thereafter, he cannot discharge his functions as the adjudicator on defection disputes under the Tenth Schedule. Our legislators learned this quickly. They could now dispatch benign removal notices to the speaker before defecting and joining the majority. After that had been accomplished, it was only a matter of time until the alleged defectors elected a new rubber-stamp speaker who would support their cause and be their crusader. At least, that is the Alfred Hitchcock thriller we had the luxury of witnessing in Maharashtra. Political Propriety and Constitutional Morality became a carcass that was dragged around by the stamping-signing authorities. Ironically, the Supreme Court judgment setting out the law, both the defectors, now in power, and the complainants, now vindicated, celebrated it as a moral victory.

Generally and specifically, that is, each time: It is absurd for a person democratically elected by a plurality of votes in a group to hold an office that adjudicates disputes about members of that group. There are five good reasons for this:

First—inherent bias— the elected person always favours a sub-group within the group, often the one that nurtures him. Worse if he continues to belong to that sub-group while also adjudicating. Second, of forced inaction—one sub-group can pose a challenge to his legitimacy and continuance in office while he adjudicates. Third, of a Smithian variety, the problem of non-specialisation— the elected person is more likely to specialise in “luck” and “loyalty” than in constitutional adjudication. Fourth, of perception—people outside the group, but interested in the group, are watching him and can influence his sensibilities. This, however, can easily be overcome by adopting shamelessness and defying any embarrassment. However, the problem is worse if the person elected has to go back to the group that elected him for rent, survival and career. This is connected to the fifth problem— of ambition— “the prize/reprimand for writing the best essay/fair judgment” trumps any remote human instinct for fairness in judgment. Judicial positions are therefore and always appointed, and appointed independently as far as possible. In the Indian democracy, all usual and logical rules are treated as exceptions as far as possible.

What I described above is exactly the design of the Tenth Schedule. The twice-elected speaker— elected first by his electorate and then by the members of the house— who is himself a member of a party, is a tribunal under the Tenth Schedule. He is supposed to decide sub-group membership and betrayal of loyalties— i.e. membership of the party and defection. This is very different from his ordinary speaker duties, which involve ensuring procedures and order in the house. This is the power to expel members from the house for voting against the party's instructions or for activities against their party within the house or outside the house. The speaker is not the adjudicator of member discipline for the proper functioning of the house; he is the adjudicator of party loyalty. The contradictions become starker when the group is smaller, as costs and benefits of decisions concentrate in even smaller sub-groups. In Meghalaya, five MLAs can topple a government on most sunny-rainy days. Bestowing judicial functions on officers elected by a majority vote is a comic farce based on a fundamental misunderstanding of the adjudicatory function.

This post is to have you join me in demonstrating how courts and parliaments “grappled with this(!!)”. Without resolving this tension about the role of the speaker, the tenth schedule hangs in a limbo. We are certainly looking for other convenient explanations for this design that might sound like convincing justifications. Please drop those in the comments.

Until then, let’s begin with some history.

Part II- Why did this come about?

When the Tenth Schedule was enacted, Congress was in decline, and regional parties were on the rise. It was a time of great churn in the Indian Polity. One CPI MP, Shri Bhupesh Gupta, opined to this effect in his dissenting note as a member of the YB Chavan Committee(which we turn to shortly). He believed that because defections had stopped being one-way traffic in favour of the Congress, and the Congress was disintegrating, defections had suddenly become an alarming problem. Shri Subhash Kashyap, in his book on defections, notes:

“Between the fourth and the fifth general elections in 1967 and 1972, from among the 4,000-odd members of the Lok Sabha and the Legislative Assemblies in the States and the Union Territories, there were nearly 2,000 cases of defection and counter-defection. By the end of March 1971, approximately 50 per cent of the legislators had changed their party affiliations, and several of them did so more than once—some of them as many as five times. One MLA was found to have defected five times to be a Minister for only five days.

For some time, on average, more than one legislator was defecting each day, and almost one State Government was falling each month due to these changes in party affiliations by members. In the case of State Assemblies alone, as much as 50.5 per cent of the total number of legislators changed their political affiliations at least once. The percentage would be even more alarming if such States were left out where Governments happened to be more stable, and changes of political affiliations or defections from parties remained very infrequent.

That the lure of office played a dominant part in this “political horsetrading” was obvious from the fact that out of 20 defecting legislators of the various States during the first year of “defection politics”, 16 were included in the Councils of Ministers in the Governments which they helped to form.”

If half the legislators were changing parties, it would be difficult to explain that phenomenon as a deviation from a democratic norm. More than 15 defectors had also become chief ministers. However, that discussion must not hold us for now. Let’s proceed. The YB Chavan all-party Committee in 1968 recommended that a law be enacted to curb what by this point appeared to be a menace, “a national malady”. The Law Members of the committee preferred that defection be brought within the remit of the existing Art. 105. This would enable the president or governor to decide these matters in consultation with the ECI. They did not deem a constitutional amendment to be necessary at all; a simple law would have sufficed. But there was a constitutional question about the legislators’ right to conscience, and the amendment was perhaps necessary. Many members tabled private member bills concerning defection, too. The Tarkunde Committee set up by JP Narayan in 1974 in defiance of the Congress, surprisingly, never made recommendations about defection. It was in this context that the parliamentary debates that ensued were illuminating. Conjecturally, this was because what was born out of the JP Movement was a political Hotchpotch called the Janata Party. Janata Party kept splitting all of the 1980s into innumerable daughter-concerns and sister-concerns.

With that background, let’s turn to the parliamentary debates.

Part III- Parliamentary becomes the stage

IIIA- Tabling the bill

Parliament back then used to be a house where meaningful discussions still ensued. It once met on November 17th, 1983, to host a dedicated discussion on the issue of defection. That animated discussion then flourished into a rich discussion on electoral reforms.

Finally, a bill was drafted by the Rajiv Gandhi Government led by his law minister, Barrister Adv. Ashoke Kumar Sen. Dramatically, and what with experience also became an irony, the bill was tabled for discussion on the death anniversary of Mahatma Gandhi, on the 30th of January 1985.

AK Sen introduced the bill. I will focus on the role given to the speaker. His reasons for giving the powers to the speaker were peculiar. Not separation of powers, not supremacy of the house or anything else; he said:

“Once it goes outside the control of the House, it will take years and years for the court to come to a decision, because there will be appeals and further appeals, and the matter will be forgotten, like the Anti-Defection Bills of the past. Therefore, if we mean business, we must give authority to decide this serious matter to the Speaker or the Chairman of the House concerned, who has been elected by the majority vote of the House concerned.”

The house hardly agreed.

Bhattam Shrimurthy, a lawyer politician from Vishakhapattanam, preferred that all parties together build some conventions by consensus, in addition to the legislation solely. A private solution of the parties by the parties for the parties, if one may. He further hastened to add:

“ it is not in the best interest and traditions of this House that the Speaker should be given extraordinary and super powers so as to disqualify a Member on certain grounds. So, the powers of disqualification are not to be exercisable by the Speaker. It will be done not by the Speaker but by the Chief Election Commissioner.”

He reminded the house that Indian houses needed a convention wherein the speaker resigned from his primary membership of the political party after he was elected the speaker. He added:

“The Speaker is the guardian of the powers and privileges of the members of the House and, that being the case, let him not be reduced to a position of merely carrying out the executive function in regard to this matter vis-a-vis the members of the House. That is why I want the Speaker to be saved from this embarrassment.”

Bhagwat Jha Azad, the Indira camp Congressi from Bhagalpur, who later became the Chief Minister of Bihar, also sounded a note of caution. “I hope the rules that will be framed under clause giving Powers to the Speaker and Chairmen, will be exercised properly”.

Madhu Dandavate, MP from Rajapur

Then rose the Samajvadi doyen, MP from Rajapur, Madhu Dandavate. He had already tabled two drafts of the defection bill in the parliament before this and was among those keen to enact a law on defection. That, according to him, was the vision laid by Jayprakashji for the Janata Party. After making a snide reference to leaders who are “so non-vegetarian that they have to swallow one leader every week”, he suggested:

“Then, Sir, I would like that Speaker should not be involved in controversies at all. Already some changes are likely to be made. For instance, if you refer to clause 6(2), it says whatever the Speaker does in connection with the actions to be taken, that will be deemed as the proceedings of the House.

If they are deemed to be the proceedings of the House in which the Members of the House will not be able to say anything on the Floor, in that case we are unnecessarily involving the Speaker in a lot of controversies, and Speaker should be kept above that.

Therefore, some Members have put forward an amendment that instead of the Speaker being in that position, some sort of a committee of the House can be formed or a joint committee can be formed which will go into the problem..”

Abdul Rashid Kabuli, the NC MP from Srinagar, referred to the Jammu Kashmir Defection Act enacted by the Sheikh Abdullah government in 1979 in Kashmir. It was the first Indian state to have made such a law. He, too, took exception to the powers given to the speaker. While condemning the recent defection by Congress members [which probably is the only case on defection decided in the first instance by the High Court], he said:

“At that time all the powers were not delegated to the Speaker and he was authori­sed to refer a case to judiciary, if he deemed it fit and the judiciary could decide the case. I think that shortcoming has now been removed in this Bill. I would also like to make a submission that when we go through this legislation and analyse it, there is a lurking fear that the Speaker may have been given authoritarian powers.

The Speaker or the Chairman is elected through due process and he belongs to a party. He is elected on the ticket of a particular party and when he seeks re-election, he has to look to that party again. A legislation should be brought in the Parliament that in future nobody would contest against the Speaker and once his non-political character has been recognised, he will have to sever all connections with his political party so that nobody may contest election against him. Then he will contest election as an independent candidate and return as an independent candidate to this House. Otherwise, if such privileges are not given to the Speaker and he is under pressure from the ruling party, it is feared that the rights of the Opposition may be adversely affected.”

Through all this discussion, the speaker termed the bill “a vaccination to an epidemic”. Adv. Tenali Venkatraman however, probingly asked, why was this not made a part of Art. 103 or some section in the Representation of the People Act? Why was the power to adjudicate granted to the speaker or the chairman? As the debate gathered steam, Jaipal Singh rose to speak.

III-B — Aayaram, Gayaram and Balaram

Source: Times

Sudini Jaipal Singh, then a first-time Janata Dal MP from Mahbubnagar, who later rose to prominence in Congress, contended that these clauses, particularly clause 6(2) making speaker decisions proceedings of the house, were violative of the basic structure of the constitution. He too wanted no role for the speaker. When prodded, the then speaker himself suggested that he was “not enamoured by the role(under the Tenth Schedule) at all.”

Jaipal Singh then identified the malady that continues with us till today, 40 years later, in precise terms:

“To leave such a grave matter to the individual's discreation(sic) of the Speaker is dangerous. Apart from tbe personality of the Speaker, what is the position of the Speaker? Speaker is always at the command of the majority party in the House.”

What transpired next is worth reproducing in full:

Mr. Speaker: That is absolutely wrong.

Jaipal Reddy: How is it wrong? I will explain my point, I did not mean to cast any aspersions,

Mr. Speaker: Before making a Speaker, it might be in the hands of the ruling group because they are in the majority.

Jaipal Reddy: But he can be thrown out.

Mr. Speaker: Yes, he can be thrown out. But as long as one sits on the Chair, he is supposed to uphold the good traditions.

Jaipal Reddy: When the Speaker's position is undependable, how can we leave such a delicate matter to the office of the Speaker? The majority of the House is commanded by the ruling party. The majority in the ruling party is always commanded in terms of the ruling clique of the ruling party, In the ultimate analysis the Speaker is at the command of the ruling clique of the ruling party.”

Notice these tensions. Whether the speaker may be trusted at all? Is the office of the speaker impartial? His term in office was undependable. He could be thrown out. This prescient warning, once ignored, would continue to vitiate the Tenth Schedule jurisprudence in time to come. The speaker continued:

Mr. Speaker: You are trying to cast aspersions on the Chair, Mr, Reddy.

Jaipal Reddy: No, ..

SHRI K.P. UNNIKRISHNAN(intervenes): He is talking of the Office of the Speaker.

Jaipal, being the genius he is, grabbed an analogy that had been used by a previous speaker. He said:

Jaipal Reddy: You are an exception to the rule, Sir. As an exception, you are the charm of the rule. । can say that we have only one Bal Ram. We do not have so many Bal Rams in all the State Legislatures. They are the Aya Rams and Gaya Rams, not Bal Ram. Therefore, you have to have that into consideration. My plea is…

The office of the speaker must not be confused with the person holding the office. The person can come and go. This is a confusion that would continue into much of court jurisprudence, had been agitated and raised long before the issue arose in the courts.

Jaipal Reddy had peered into an important flaw of the Tenth Schedule. He concluded:

“the Law Minister should agree to our proposal for tbe formation of a Judicial Committee on Disqualifications, which could against the Speaker in the matter.”

III-C — Anxieties from the Cow and the Calf

There were a few murmurs about the ouster of the courts to preserve the legitimacy of the house and its proceedings. However, the discomforted chorus about the speaker being the adjudicator was growing. Kishore Chandra Deo also joined the now-growing chorus that the Speaker’s sole jurisdiction must be ousted in favour of a judicial committee. So did K Ramchandra Reddy from Hindupur. He also sought a distinction between the speaker's and the deputy speaker’s roles in any case. He expressed a fear that clauses 6 and 7 might be reasons for the court to strike down this schedule.

Finally, Ashoke Sen, the affable law minister, stood to respond. It was a wishy-washy response, a response that left much wanting. Certainly, a response that was not that of a measured lawyer. He said:

“The other questions are about the Speaker’s authority. It was our clear intention from the very beginning that we are not going to allow this matter to be dilly-dallied and tossed about in the courts of law or in the Election Commission’s office. I had myself appeared in the courts along with late Kanhaiya Lal Mishra Ji for winning our symbol. Babuji (Jagjivan Ram) is also there. He was the President of our party then. We used to go very regularly and Shri Siddhartha Shankar Ray was assisting me at that time. But by the time we won back our symbol, it became worthless, because we had already won the election not on a pair of bullocks, but on a cow and a calf.

Therefore, that type of delay should not be tolerated any more. We want a quick decision. If this Bill is to be effective, and if defection is to be outlawed effectively, then we must choose a forum which will decide the matter fearlessly and expeditiously. This is the only forum that is possible. With these words, I commend the Motion for consideration.”

Once bitten, twice shy. The Congress(I), being given a Cow and Calf in the 1971 General Elections instead of a bullock and a yoke, a delayed decision and an anticipation of the slow judicial process, was an important factor that had cost us an independent Tenth Schedule adjudicator. The idea of tribunals had been very much popular then. However, we are world-class participants in the sport of repackaging the most convenient explanation as the most convincing justification. The bill was adopted unanimously and without changes. The cracks in this design began to show within a few years.

Part IV— What did the Courts decide?

When first asked to decide whether this decision within the house by the speaker is constitutional, in Kihoto Hollohan, a thin majority (3:2) agreed that while the courts will continue to decide appeals from this decision, the speaker shall, in the first instance, decide the defection disputes that arose within the house. The ouster of jurisdiction of the court in favour of the speaker was, in the opinion of the majority, severable. That is, the credibility of the entire tenth schedule did not hang on the ouster of the court’s jurisdiction in deciding defection cases, in the first instance. As long as the constitutional courts could hear appeals, all was well.

From a legal point of view, all actions of the speaker are subject to appeal and can be set right at a later date. From the political point of view, however, a week later is too late. Legitimacy of the government, perceptions, control over money, resources and state police, control of the party in the interim; too much is at stake to wait for the court to overturn anything in appeal. Everything that happens in the interim under any seal of the emblem or is deliberately omitted eventually turns permanent. It hardly matters to the lay voter who is wielding the seal and what they are stamping. For example, the farcical speaker decision in the Maharashtra defection was in the teeth of the Supreme Court’s specific instructions in Subhash Desai and remains pending in appeal one year after successfully completing their term.

Kihoto was far back in 1992. Mere six years into the new law, trying to change the Aayaram-Gayaram Culture. The Kihoto ruling, however, was made despite the experiences and writings about the impartiality of the speaker; despite the insights accessible to that era. The 1990-91, the Janata Dal-Split engineered by Chandra Shekhar was playing out in the Lok Sabha itself. Constitutional experts and some members of the assembly were in chorus that there must be a judicial determination of defection by a judge or a judicial committee in the first instance itself, rather than on appeal. See here for some details. For instance, in 1991:

“..the then Union Law Minister (Shri Subramaniam Swamy, of the Janata Dal (S)), in his (public) interview, threatened the Speaker to get him arrested if he (Speaker of the Lok Sabha) did not postpone indefinitely the last date for submission of the replies of 37 Janata Dal (Samajvadi) members, whose disqualification under the Anti-Defection Law had been sought by the Janata Dal”

Former Speaker Mr. Shivraj Patil himself, in his decision of June 1, 1993, duly noted:

“Since Speakers in India are, after all, party members, they should not be burdened with the job of pronouncing on the membership of their fellow members. Whatever they decide, motives would be imputed to them.”

Two dissenting judges in Kihoto foresaw the bias that the speaker’s decisions could create. They noted:

“The Speaker, being an authority within the House and his tenure being dependent on the will of the majority therein, likelihood of suspicion of bias could not be ruled out. The question as to disqualification of a member has adjudicatory disposition and, therefore, requires the decision to be rendered in consonance with the scheme for adjudication of disputes. Rule of law has in it firmly entrenched, natural justice, of which, rule against Bias is a necessary concomitant; and basic postulates of Rule against Bias are; Nemo judex in causa sua - `A Judge is disqualified from determining any case in which he may be, or may fairly be suspected to be, biased'; and `it is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done.”

However, it was a dissent, an opinion for a kind perusal by history and the future, not law. The Tenth schedule continued.

The judges in the majority also did not recognise the modus operandus of giving notice of removal before defecting. This would only flourish later. The speaker lost de jure power once a removal notice was given to him. He could not adjudicate on the defection. This only came up later and was decided in 2016. In Nabam Rebia (See Issue III here), the court held:

“…it is necessary that the Speaker as a tribunal has to have complete detachment and perceivable impartiality. When there is an expression of intention to move the resolution to remove him, it is requisite that he should stand the test and then proceed.”

This, however, contradicted the holding in Kihoto Hollohan. The court there had held:

“It is inappropriate to express distrust in the high office of the speaker, merely because some of the speakers are alleged, or even found, to have discharged their functions not in keeping with the great traditions of that high office. The Robes of the Speaker do change and elevate the man inside.”

In both Rebia and Kihoto, the court desired an unbiased and credible speaker. If wishes were horses, beggars would certainly ride. The Kihoto bench was more gracious and trusting of the person occupying the office of the speaker. The Rebia bench was more cynical and insisted that proving a majority was essential for exercising functions as a speaker. The Rebia bench in the least implicitly accepted the proposition that the speaker’s fate hung on enjoying the confidence of the majority, even if that majority included alleged defectors. Unless the speaker had finally adjudicated, an allegation of defection is a mere allegation. The defector continues to be a full member. There was no ipso facto or per se defection, without adjudication. However, a mere suspicion of loss of confidence in the house in the speaker, even if caused by the act of defectors, disabled the speaker from exercising the functions of the office till he demonstrated numbers. Accordingly, he could not adjudicate defection.

In Subhash Desai, the court made some course corrections. First, a reference to examine the correctness of the holding about the role of the speaker in Nabam Rebia was made and is pending before the Supreme Court now (here).

The court cannot supervise anything done by the speaker in the tenth schedule proceedings except by way of appeal of the final order. The court thus found a way as follows: It extended to the speaker the ability to hold onto his chair by allowing him to assess the bona fides of the notice for his removal. A Speaker can now examine if the application moved for their removal is bona fide or intended only to evade adjudication. There are no standards for how that assessment must be made. It is not clear if this still applies if notice is issued by a legislator who is not defecting (clandestinely, on behalf of the defectors). The court will, however, supervise this exercise without having to wait for a final decision on defection itself. The court, therefore, implicitly accepted that if one empowers the speaker, an external check is necessary. If one does not, the act of defection will be an unblemished fait accompli. The courts can allow the existing speaker to continue in office, but it is not certain for how long and on what terms. When, if at all, will the notice for removal take effect? How long will the speaker continue without enjoying a majority? Will he have to decide within a timeframe? Or can he then abuse the protection afforded by the court? The holding raises more questions than it answers. However, the speaker so appointed, once affirmed by the court, could suitably, at his sweet will and convenience, dispose of the tenth schedule petitions.

Part V— Summary

The person holding the office of the speaker must be trusted to adjudicate impartially on the tenth schedule, or maybe not. This person must be required to have demonstrable majority support in the house to continue as the speaker, or maybe not. This person’s adjudicatory powers over tenth schedule petitions must not be disabled as long as he is in office, or maybe not. He must be allowed to assess the bona fides of a removal notice, nor maybe not.

I will repeat what I wrote earlier: it is absurd for a person democratically elected by a plurality of votes in a group to hold office that adjudicates disputes pertaining to members of that group.

It is aspirational to ever presume that there is a single normative answer to the question of whether every person holding the office of the speaker will be impartial. It is necessarily a factual question, a descriptive question that can only be true if at all, about a particular person holding office at a point in time.

If the speaker is impartial as a rule, both persons appointed before and after defection are impartial, and there is no reason to fret about any of this at all. If the speaker is not impartial as a rule, both persons holding office now or after defection are not impartial. This time, there is a reason to worry, but it is less a worry, more a suffering. Because there is only one way out. Do not ask the speaker to decide, do not let him decide. If experience were to be any guide, we must distrust all the persons occupying the office of the speaker as a default. The court recognised this today and made a suggestion that a judicial tribunal be established. Constitutionalism is often an enterprise of balancing trust with power; convention with rules. Appointments in that tribunal will still be a challenge. But the Supreme Court will exercise firm and direct oversight over the working of that tribunal, and that will be a good thing, certainly better than what we have.

See Above: Supreme Court yet again recommends that an independent judicial tribunal be appointed to adjudicate upon cases concerning the Anti-Defection Law.

Part VI- Restraining Executive Control

This proposal for an independent authority by the Supreme Court has taken various forms before.

This was recorded by the Election Commission report in 2004:

“All political parties are aware of some of the decisions of the Hon’ble Speakers, leading to controversies and further litigations in courts of law. The Commission sees substance in the (above) suggestion that the legal issues of disqualifications under the Tenth Schedule should also be left to the President and the Governors of the States concerned, as in the case of all other post-election disqualifications of sitting MPs, MLAs and MLCs, under Articles 103 and 192 of the Constitution. In the case of disqualifications under the Tenth Schedule, also, the President or the Governor may act on the opinion given by the Election Commission.”

The Law Commission in 2015 recommended that this adjudication must be done by the president or the governor, as the case may be. This was also recommended by the Goswami Committee report, 1990. However, this is even more outrageous, given control of the Union Executive over both these offices and its overlap with the party system in India.

The takeover of the voter by the party system and excessive centralisation of power in the top brass of the party will be accentuated with this centralisation. The Tenth Schedule became a law without states ever ratifying it. The Indian Constitution does not require that any amendments to the part on state assemblies and state governance be ratified by the state. No one asked the state assemblies if they wanted an Anti-Defection law or whether this scheme/ design is workable. The parties stood in for state assemblies. This is likely to continue if and when a reform proposal is considered. However, one must guard against this road-rolling on state assemblies’ willingness to sign up for a centralising scheme in matters of defection.

Thank you for reading! Feedback is welcome!

Almost all of this is a matter of public record and has been written about in greater detail. (Here, Here). There are other important issues like voters’ right of conscience, split and speakers’ role there, political consequences and so forth that this post does not deal with at all.

Gavai CJ. greeted members of the bar with the traditional slogan of resistance Jai Bhim.

Gavai J. being appointed as the CJI, reminded me of the grave atrocity committed in Maharashtra fifty-one years ago. I had read of it in JV Pawar’s historical account of the Dalit Panthers, a movement he co-founded. In Akola, year 1974, Gopal and Babruvahan Gavai (not related to the CJ but the same caste-group) were working with Gopal’s sixteen-year old daughter in Mr. Shinde’s field. Gopal’s daughter was raped by the field-owner’s son and she remained pregnant. When Gavai brothers pleaded with Mr. Shinde that his son marry Gopal’s daughter, FIRs were registered against the Gavai brothers and Gopal’s daughter for concocting accusations. The Shindes later ganged-up and gouged the eyes of the Gavai brothers. Read the excerpt from the book to learn how the Panthers brought this atrocity to light. The caste-group connection was instantly forged within my mind. In part this was an important reminder of the historicity of the caste struggle, in part an ugly guilt about a caste-consciousness.

The political struggle of equality seldom transforms into love, belongingness, empathy or shared-solidarity. It at the most uncomfortably bridges two groups and identities and tries to meld them into the fictitious citizen identity. Worlds often mingle but the millieu can never really dissolve in the teeth of historical forces of difference, diffidence and derision. ‘Our’ and ‘their’ universes remain divided by luck, privilege, accident of fate and the history of oppression. To illustrate, I will draw on two examples my own little world so as to not appropriate experiences. My otherwise noble late grandfather, a God-fearing Congressi Sarpanch, was trusted to have been fair, kind and generous to all. However, as soon as he was back from public gatherings he had to bathe to wash away the shadows and evil spirits afflicting him. In a snail-shift, my parents were gradually convinced to give up some notions of purity and for instance stop keeping separate utensils for maid-servants. Much of this change is tokenist. My parents for instance married inter-caste and in face of staunch opposition; however they will be quick to shoot down a proposal of me marrying a Dalit woman. In most savarna spaces there is commonly routinized outright derision of Dalits and their ‘lowly-distinctiveness’. In some others, the general outlook is that of a haughty, benevolent and delusional acceptance of ‘them’ and ‘their ordeal’. Very few of my siblings from the upper-caste-community will therefore celebrate this occasion of a Dalit Nava-Bauddha being appointed the Chief Justice, in fact some will even be sore about it. I am afraid that the historical and civilizational significance of this achievement of a century-long struggle will perhaps not dawn upon them. That is therefore the first reason to write and; to them is my most important invitation to celebrate.

Further, not too many Marathis are seen celebrating that the genesis of this struggle and its success all emanate from Maharashtra. Gavai CJ. was born in a Marathi family in Amravati and cut teeth as a lawyer in Nagpur. Gavai followed his father’s footsteps in caste-politics through the now-splintered Republican Party of India before turning to rendering judicial services and reaching one of the highest constitutional office. (Watch his mother describe how the CJ was meant to do politics but landed in the judiciary). The Republican Party, Panthers’ movement, politics of Ambedkarite resistance, Deekshabhoomi and neo-buddhist movement for preserving a dignified distinctive existence—all struggles—the culmination of which is Gavai J.’s life and his eventual elevation as the CJI originated in Maharashtra. This historical fact should not go unregistered in Maharashtra as a victim of fractured fraternities. It is a legacy of struggle that should be owned-up, shared-in or celebrated-along. It must not remain an inconvenient footnote to the history of the State. This is then my second reason for me to record this celebration as a post and to invite attention of my Marathi siblings. I must recommend Jai Bhim Comrade to apprehend a part of it better.

Gavai J.’s appointment as CJI would be a milestone and no less than a silent revolution for many: a vindication of their faith and struggle in Baba’s mantra, struggle and life. Some may certainly have muttered under their lips that unlike Gavai CJ., they are condemned to wait for their stars to align in this Republic of Chance. They might remind us that not everyone’s father is Dadasaheb Gavai. However, great many brethren, Nava-Bauddhas amongst them, who hang Baba’s portrait in their living room and praise it before any God, would have their hearts full that Baba’s vision was realized by at least one of Baba’s foot-soldiers. Today is a big reckoning that “it is possible” and “we did it”. Many Dalit parents certainly instructed their children to watch one of them becoming the Chief Justice of India. Holding the highest office in the institution that is the guardian of public reason and constitutional values in India. Ambition, assertion, inspiration, acceptance and vindication are all central to the universe of struggle. All these ringed through WhatsApp notifications throughout the country today. Sharing in this success and struggle is the third reason for writing this post and extending the invitation to all.

Political equality then is a necessary site of defiant conflict that can vindicate and legitimize experiences and struggles. Political equality is crucial to wrest the narrative and cloak the struggles and inspiration to strive in a new vocabulary of haq and aazadi. It is also an affront to entrenched hierarchies suppressing such liberation. Many amongst us wouldn’t celebrate this opportune moment and would remind ourselves and others of the enormous dark abyss that yet awaits us. Usefully remind that this divide affects only some of us. However, Gavai J. becoming the Chief Justice of India is not a momentary wild-card charade or a mere show-piece in an old and persisting world of contradictions. Nor is this just another act of benevolence by the great Republic and its self-healing civilization. It is a mark of a person and a community having overcome the boundaries of caste-identity in a casteist-society with sustained steadfast defiance and struggle. That mark not only be made distinctly but also heard, talked of and accepted but also welcomed and celebrated. That is my fourth reason for this post and invitation.

This image would have betrayed even the most Utopian political imagination of a future-India seventy-five years ago:

Ms. Droupadi Murmu, a Santhal woman, the Santhals who first led the revolt against the white man— the first citizen of the republic. Gavai J., Nav-Bauddha from amongst the Scheduled Castes, now appointed the Chief Justice of India. They greet each other with the very Indian Namaste.

We rarely pause to appreciate and applaud the struggles in such solemn moments, and that then is my final reason to write this post. This moment has been earned with struggle to which respects and tributes must be paid. This appointment marks a milestone in the chequered history of identity-based oppression that continues to beleaguer the Indian civilization. It is a silent re-iteration of an undying faith in the promise of a shared and equal republic. This is one in the line of Thurgood J., O’ Connor J., Fathima Beevi J. and Balakrishnan J. This is one for the history and for the future. It is a flicker of fraternity emanating from a constitutional promise that must keep glowing bright.

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In their excellent new book, Prashant Reddy and Chitrakshi Jain document their prognosis of the problems plaguing the district judiciary and recommend solutions. In this post, we shall critically review the propositions therein. Their most emphatic and pragmatic solution is transparency. If you are even remotely interested in the Indian State, the Indian Economy or Society, this book is addressed to you. Before this book was launched, a subcommittee of the National Committee on Court Management System was studying Human Resources Development in the district judiciary. We lack credible data to demonstrate the lacunae in the working of the district judiciary. The National Judicial Data Grid produces some data, however, I learned from this book that this data is of dubious credibility. What should be case-level entries are, in fact, case-stage-level entries. My posts and other reports have provided this data before; which is probably an overcount. At the outset, I acknowledge that the ideas in this blog are a distillation of the book and the report, with some comments.

I- ACR Raj and Conduct Rules

Of the many things that stand out to me, District Judges are generally governed by All India Service (Conduct) Rules or State Government Conduct Rules designed for career bureaucrats in the administrative services of the executive branch. The judicial function requires much more than these rules provide for. District Judges are often governed entirely by the respective high courts without any balancing check by the legislature or the executive. For many states, the appointment is entirely conducted by the High Courts too. High Court judges write the infamous “Annual Confidential Report (ACR)” for the District Court Judges. The work profile of judges does not lend itself to a point-based assessment on a bunch of factors. However, this is how ACRs are designed and deployed. As the authors of the book point out, ACRs also play a prominent role in the promotion of judges, forced retirement and career assessment throughout. Often, an interview of the concerned judge is not deemed necessary to enter an adverse entry in ACR or give them feedback. The NCMS subcommittee on ACRs recommends adding this (See Chapter IV here).

A point which the book misses, but the NCMS report picks up, is that picking the judgments based on which the judge is assessed has no uniform guidelines. Which judgments and how many are to be evaluated vary vastly by the state. Monitoring and mentoring in the judiciary, unlike the executive, are much different, infrequent and sparse. The direct engagement of the High Court judge with the district court judges under his administrative control is sparse. It is unclear if it is sufficient for him to write an ACR of the judge. The NCMS report notes this, too. Many states do not provide the judge a copy of their own ACR after evaluation. The NCMS recommends all states provide the copies. The NCMS report, interestingly, also introduces points for Academic work, which is a welcome addition. Here are the notified rules and format made by the government for the judicial service in Karnataka.

The ACR performance also depends on service units. Every judicial task is assigned a specific number of units. Judge’s overall service rating then depends on how many units he achieved. Here is the sample ACR from the Gauhati High Court with full details on how the unit scoring system works. Find snippets attached:

Goodharts Law?

Source: Jono Hey

When high-powered incentives are in place, tokenist rather than substantive compliance may take over. The authors of the book correctly note that the cases that give similar points with minimum effort are more likely to be taken up first. The ACR rules must be committed to heart by every practising lawyer. These are also great materials for an economic theorist trying to study incentives. It would be excellent to train a weighted model on these scores and then track these in case-disposal outcomes. These points have not been designed based on any data on case progress, but on a hunch and experience, because such data on time for disposal was not available when the rules were made by the Courts. It is guided by general experience on how much time a particular part of a trial in a particular type of case is likely to take. As the authors find out, there are also separate incentive points to pick cases older than five years. But the complexity of those cases is often a prohibitive bar which is unlikely to be overcome even with incentive points.

We must also understand the data collection problem for designing an exhaustive incentive scheme, which the authors of this book mention. These have been further studied in detail by Daksh.

_{I-A. Problem with Case Typologies}

a. Unique case types vary across the states. Much of this is a plain classification problem. But, there is also the issue of diverse caseloads.

b. The range of different statutory enactments on which cases are tried changes all across the state. In some Courts necessarily some cases are found more predominantly in others.

c. Different unique stages of trial of cases in the Lower Judiciary

Source: DAKSH Deciphering Judicial Data.

We do not have a clear typology of cases. Nor is there clarity on the different stages a case-trial goes through. It varies by the court, case-load in that court, the history of the court and the High Court where the court is located. It is absurd that judicial officers’ performance evaluation, among other things, depends on how the court officers and advocates feel about them. Furthermore, this general scoring sometimes matters more than the quality of their judgments. Integrity depends entirely on Registrar-Vigilance’s reports. The NCMS committee acknowledges that vigilance committees, wherever present are understaffed and short on resources. The book recommends a separate commission for reviewing complaints against judges. This is reviewed in the next section. Following are some sample marking schemes:

By the Gauhati High Court for the Assam Courts

Rules by the Karnataka Government

Karnataka is among the first governments to frame rules directly for ACRs. This format is better because it allows for three levels of review of remarks against the judges, thus strengthening independence. Other governments have mostly left it to the High Courts, which the authors of the book bring to our attention. See this not-so-great 2018 report by the law ministry studying how judges are evaluated across the states. The issues are also studied by the NCMS Report on ACRs.

II- Judges are not Bureaucrats

Treating judges like bureaucrats might bring very difficult problems. Such administrative treatment is premised a misunderstanding of judicial function. Assessing judges in the absence of a better metaphor is akin to assessing academics for their research output. Prof. Baxi has some guidance on how one may judge the judges in the higher courts, which is worth reading in this regard. There have been many solutions in literature globally which are worth considering: These include randomly picking judgments for assessment, bias-reducing measures such as double-blind peer review of the quality of their judgments by peers and a senior committee, including impartiality in courtroom conduct as a marking parameter, studying user perceptions through interviews, decentering the office of registrar-vigilance into a vigilance committee, conducting courtroom observations through senior judges beyond the period of probation, making the paramters of evaluations transparent and public, setting up a bar committee to transparently review evaluations, interview with the junior judges for feedback and correction, remedial training, etc.

A survey of the judges to understand their pressures and design a comprehensive evaluation method would also be useful. Making judges independent of judicial colleagues and seniors is as important as making them independent of the executive and the legislature. [See the Bangalore Principles of Judicial Conduct.] This is also not apparent in the operation of the lower judiciary. A judgment being overturned on interpreting a point of law or its misapplication in an appeal becomes an adverse remark on the capability of the judge and is sufficient to cast doubt on both his competence and the impartiality of the judge. The book demonstrates some instances of this. A judgment by itself, no matter how bad in law, cannot by itself cast any doubt on the impartiality and integrity of the judge. This promotes risk-averse behaviour in the grant of bail.

The Supreme Court Manual on Prison Reforms (p. 182) takes note of this well-known fact in cryptic words and implicit terms:

It is important that the judicial officers pass orders concerning the liberty of individuals, free from any kind of influence or pressure. No external or internal hierarchical biases should affect the judicial discretion of judges in granting bail in befitting cases.

The Court also quotes from Sadhana Foundation v. State of UP :

Furthermore, one cannot overlook the reality of ours being a country wherein countless complainants are readily available without hesitation to tarnish the image of the judiciary, often for mere pennies or even cheap momentary popularity. Sometimes, a few disgruntled members of the Bar also join hands with them, and officers of the subordinate judiciary are usually the easiest target. It is, therefore, the duty of High Courts to extend their protective umbrella and ensure that upright and straightforward judicial officers are not subjected to unmerited onslaught.

III- Transfer Raj

Another thing plaguing the judiciary, like all bureaucracies across the world, is: TRANSFERS. Jurisdictions preferred by bureaucrats have generally had better state presence (See evidence in executive bureaucracy here). The issues related to frequent transfers are too well known to be detailed. However, in the judiciary specifically, the incentives to take up cases that take longer are much lower if transfers are frequent. Frequent transfers are also a source of anxiety for the judges, increasingly female, because they disturb family life. This is accentuated by the scoring-based ACR, as the authors of the book usefully point out.

Another distinct kind of transfer in the judiciary is the docket transfer, wherein the judge periodically rotates between presiding over civil and criminal proceedings. Authors argue that both jurisdictional and docket transfers are frequent and plague the district judiciary, and affect the disposal of complex cases substantially. Judges in the higher courts also have specific areas of competence and often sit on those benches. It is unreasonable to impose docket transfers in the lower judiciary without a better justification for this practice.

The authors contend that there is no evidence that experience is gained from transfers. However, when advocating policy change, the burden naturally is to show that the status quo is unmeritorious. Creating such evidence is crucial. Transfers are also an effective and preferred form of disciplinary action, to the dismay of the courts, where such judges, against whom disciplinary action is preferred, get transferred. Another question which economists may help answer is what is the optimal length of judicial tenure in a place? What factors enter such determination? Should there be rule-based randomised transfers in the judiciary, or is there merit in preserving discretion?

ACRs, Transfers and forced retirements closer to the end of tenure, combined with no immunity against allegations and complaints, make judges’ jobs harder. Writing a judgment that is bad in law cannot be a valid excuse to initiate disciplinary proceedings against a judge unless there is proven misbehaviour or incapacity. Even patent errors cannot by themselves not grounds for disciplinary action. The standards for proceeding against judges on competence have to be very high. Frivulous complaints constantly make judges anxious. The judges may be remanded to re-training on particular aspects of law and required to pass exams, but dismissal post-appointment and a full probation for incompetence is unwarranted. The authors emphasise these aspects while examining relevant court decisions. The judiciary must not conduct disciplinary actions on informally acquired information, like a church or even like an executive bureaucracy. Whenever extraneous considerations are alleged and substantial charges framed against a judge, the charges and details of the trial must be made public. The act of disciplining the judges is too important to be conducted in a clandestine, close coterie by justifying it through an ecclesiastical reference to retaining faith in the judiciary. It is crucial to release judicial independence from the sole disciplinary control of the High Courts. The Apex Court is generally deferential to the High Courts. The basic vitals of judicial inquiry processes cannot be shrouded in mystery.

IV- Some thoughts on the solutions proposed by the authors of the book

1. Transparency

The authors suggest forming a full-time Commission separate from the High Courts to screen complaints and conduct investigations against judges of the district judiciary. They also recommend a law laying down well-defined and transparent procedures. This has an important federal challenge to consider; a parliamentary law would wrest the control of the lower judiciary from the States. Given the unreasonable centralising drift already extant in the constitutional design (See Bhatia 2025 detailing this), such centralising change is best avoided. The constitutional amendment would centralise the judiciary further.

State-level commissions would certainly have a serious capacity and political control problem difficult to reckon with. The state governments, however, can and should make rules that emphasise transparency and decentralised committee-made decisions within the judiciary. Civil society can take up the burden of judicial accountability with more transparency on the decisions, thus made. Extending the RTI directly in the light of CPIO v Subhash Desai, by intentional and communicative legislation to the administrative side of the judiciary, might be a useful solution to consider. There are genuine transparency interests to be protected in both the higher and lower judiciary to balance independence. This is especially true of matters about disciplinary actions against judges. However, the clandestine manner of inquiries into complaints does more harm than good. The authors of the book also note, as a matter of regret, that most RTI applications sent by the authors of this book to the High Court Registry on the issue of disciplinary action were returned unanswered.

2. Caution on Executive Control Missed

While the authors are optimistic about the executive making rules for the local judiciary, its perils are scantily explored. Our experience with tribunals right from P. Sambamurthy and L Chandra Kumar till now must teach us a thing or two about executive-controlled appointments and transfers in the judiciary, especially the lower judiciary. In P Sambamurthy, the State Governments had taken upon themselves the power to unilaterally modify the orders of the administrative tribunals! If we trust the legislature to make the rules, we are one step away from losing control over what kind of rules get made. Absence of a strong civil society and clear consensus in the bar about this will make matters worse.

3. Limited evidence to entrench permanent posting and dockets

Permanent Posting of a Judge in a District and permanent docketing is another solution raised. Gain in experience, especially in the early years of service, gained through transfers, is often large, contrary to the author’s claim. This can be testified by their admissions in chapter 5 about how the new joinees are inexperienced in the manner and etiquette of the court. The authors of the book offer no evidence why the experience is not gained. They suggest that there is no evidence that it brings benefits, but to change policy, one ought to supply evidence.

4. Tradeoffs on incorporating practice requirements for the judiciary have not been explored fully

I could not get myself to agree with the proposals listed in Chapter 5. The average age of person joining the judiciary in India is under 30 years and has virtually no experience of the law and its practice.The authors make a formidable case for hiring lawyers with experience based on an application describing their experience, much beyond the minimal two- to three-year experience requirements, rather than by way of an examination.

Source: EPW 2020- Breaking through the bad boys club

The authors trace the history of the proposition on the practice requirement and how it came to be unreasonably abolished. This issue is currently sub-judice in the Supreme Court. While the practice requirement is essential, the legal profession in India is feudal in its organisation. Authors, for instance, do not explain why old seasoned advocates would want to join an entry-level lower district judiciary job. The existing image and structure do not necessarily make it lucrative. Paying juniors is also a rare practice at the bar, and the average pay is miserable. Most pay structures of entry-level advocates throw the Minimum Wage enactments to the wind. Unlike other professions, such as ICAI, ICSI, where apprentices are paid reasonably, junior advocates have to take learning (sic) as their compensation. Therefore, experience requirements for the judiciary are burdensome on entrants from marginalised communities. The proportion of women judges in the sub-district judiciary has improved to 38% (!), which is higher than any other field in India and is a welcome achievement. Introducing exorbitant practice requirements makes entry into the lower judiciary impossible. The authors’ solutions to this collateral damage are vague and unlikely to be successful.

The SC subcommittee noted that 16 out of 20 high courts are in favour of some form of practice requirement of up to three years. To accommodate the drop in women applicants, they propose vertical reservations for women and age relaxation of up to two years during recruitments. One may see the recommendations by the High Courts in Annexure 2 here. Getting a judicial job before and after marriage means very different things for practising women. This is one field that needs intervention and careful discussion by the legislature. One interesting suggestion from Madhya Pradesh, for instance, is to waive practice requirements for outstanding graduates clearing all exams in the first attempt and scoring 70% aggregate marks in their university exam. One might even agree on a two-year practice requirement as in the report, but the book authors suggest excluding written exams and instead recruiting through essays explaining a career as a lawyer, along with an interview. Though a powerful idea, it needs careful unpacking from the point of view of its general equilibrium effects on people joining the law, entering the profession and surviving it. One useful suggestion from the authors is to lift the upper age limit on writing the judiciary exam. This will have to be coupled with the mandatory experience requirement. Experienced lawyers must be welcome to write the exam if they so wish.

5. The Role of the bar is crucial

The authors advocate continuing reservations in judicial appointments based on experience, and that the government should hire women and fresher graduates from marginalised communities for them to get experience. This, with due respect, is absurd. There is no mention or hope that the Bar will fix their payment and hiring structures to make law a respectable early-career profession. There is no emphasis on how the examination for selection and training may be redesigned.

If a 23-year-old IAS officer can manage a budget of a few hundred crores as Zilla Parishad CEO, it is unclear why a young judge cannot be trained to judge better. The authors are apprehensive about “probationary judges” making decisions. While I empathise with this, the solution is to attach juniors to chambers of senior judges and require them to sit on the bench with senior judges in the first year as part of paid training. This is common in the All-India Services. Reasonably smart lawyers can be trained by senior district judges. The respect and honour the profession and the legal community bestow on district judges and young lawyers also need to change. While the bar might readily pass the buck to the executive and blame design problems, the bar is very much a part of this problem. The advocates asking for and the judge granting adjournments is another part of the problem, for the poor quality of judgments has not been expressly examined. The SC also recently questioned why the Bar should have a monopoly over setting the standards of training for lawyers.

6. ‘Two chains of courts’ is a flimsy solution where too many state and central acts overlap; specific sections of central acts have state amendments

One other suggestion in the book is to create two different chains of courts, one for state laws and one for union laws. With this, however, coherence might dip, polyvocality might increase, and integration and harmony might reduce. It is arguable whether efficiency will increase because many matters have concurrent laws, which are enforced simultaneously in similar offences. This suggestion, in my opinion, is based on an error of judgment about how the web of laws operates. If at all, this needs a lot of experimentation before it even becomes a serious proposal.

7. New High Court Benches in growing towns is an issue much beyond critical mass and is a Tier-1 reform proposal

A serious issue the authors flag is of High Court Benches. Many state governments are genuinely interested in establishing new benches of the High Courts. Many courts need such a bench. Kerala, Odisha, Haryana, Jharkhand. Pune, for instance, urgently requires a High Court bench. So does Thiruvananthapuram, and a Parliament bill to that effect keeps coming once in a while. Proposal for a Bench in Balangir is pending too. This is a top-tier reform proposal that must be granted as soon as possible. It is learned that the CJ’s of high courts have often blocked these proposals. But that must not be done. Many new Indian cities urgently need High Court Benches. We ought to be building courts for the future.

8. Focus on Legal Training is essential in the long run

This issue certainly needs more careful design thinking, and the authors do a great job of sparking the conversation. They also do not focus on poor legal training in India as a systematic challenge to solve. 49% law graduates in India failed the Bar Council Open Book Law practice eligibility exam. How to do it is beyond the scope of this post. For training judges and state judicial academies, some suggestions are here on P. 32, a summary of the standing committee report, and an excellent report under Prof. Faizan Mustafa.

9. Other issues— Juries, procedural law, Indian Civil Society

Similarly, exploration of juries and procedural law in the book is scant. The literature on juries in India is generally scant (See Kalyani Ramnath, who researched juries on this). The authors suggest that there is caste bias in the judiciary, which may justify the use of juries. However, this is not empirically founded. Can the jury be a fraternal and competent institution? While the role of judicial discretion, especially in criminal trials and sentencing, is very high, a comprehensive case for juries was beyond the scope of this book. The evidence on jury effectiveness is mixed, but we should certainly consider experimenting with the trial jury or a grand jury system in some town courts.

The authors also state that ejecting procedural provisions is unlikely to hasten litigation. Consumer Protection Act, National Green Tribunals and PILs are the three examples the authors used to construct this narrative, but do not provide a contrast of what they have achieved. While procedural law is valuable, strictly theoretically speaking, doing away with it might certainly expand access and reduce time. We need more empirical work on the localisation of justice and easing procedural norms. It is important to ask, for instance, what the Nyaya Panchayats have achieved or evaluate the Commercial Courts Act. The book has no answer on why such acts are enacted, and may be ignoring their impact on the local state in India.

Concluding remarks

The book does not explore the facet that the Indian civil society is fragile and fractured, and organised as interest groups. Much of judicial holing up and non-transparency is governed by this urge to be the sole guardians of public reason and propriety. Control by the higher judiciary is a lesser evil than the parliament in perceptions of the higher judiciary, and the fear is not without history or unwarranted. All this being said, complete independence of the district judiciary in passing orders is a worthy and necessary pursuit. More optimal tenure sizes and allowing the judges to specialise five years into their career without docket rotation would also be excellent ideas. All authors' suggestions on reforming bureaucracy within the judiciary—ordinarily called ministerial officers— namely: a new professional agency, added transparency and renewing the data collection project to correct varied and accurate, are also excellent. Surveying the judicial officers in lower- and district judiciary is also critical.

There has been more movement on reforming the district judiciary in the last five years than in the seventy years before that combined. This momentum must continue.

1. Jails Overcrowded — Prison Statistics have not been published since 2022.

2. 77% of prisoners are undertrial and the numbers are highest since 2010.

3. Five-year case pendency as of January 2023, immediately after COVID

4. Five-year case pendency as of January 2025

5. Increase in trial court cases pending for over three years in January 2025

6. High Court Pendency

7. Judicial and Police Vacancy

8. Vacancy in forensics

9. Bail Rejection Statistics

Source: Supreme Court’s useful report on Prison Reforms, Undertrials and Prison Manuals

10. Progress over the last ten years. The spending is in Nominal Rupees and must be understood accordingly to have stagnated.

11. Legal Aid

8. Most states have abysmally low training budgets

9. Good news: Share of Women in Lower Judiciary is increasing.

Some links

1. Research on Judicial Reforms in India by Daksh Legal.

3. JALDI— by Vidhi Legal

Prof. Harris in his paper titled ‘Bonding Word and Polity’ introduces his idea of the enterprise of interpretation by making the word-polity relation apparent, in an evocative fashion :

American constitutional interpretation takes for granted the elemental preposterousness of its subject, namely the presumption that a political world can be constructed and controlled with words. The Constitution of the United States did not describe a political constitution that already existed; it generated a republic, wresting the three-dimensional contours of a new public order from the two-dimensional realm of thought and theory. The words narrate the polity into existence and, as its working principles unfold, the polity becomes a kind of large-scale text in its own right. Moreover, a polity that is sustained by words in turn gives those words political meaning. Constitutional interpretation is a two-text project that at its simplest can be seen as therefore reconnecting language and politics, or rather finding the connections by which one gives meaning to the other in what might be called a structure of constitutive signification.

Prof. Harris then draws on semiotics—the study of system of symbols and the relation between the signifier and the signified. According to him, the Constitution (Codex) signifies the constitution (The Political Order) it creates.

The paper builds a simple and elegant theoritical representaton of four modes of interpretation. Focusing on one axis on positivism v structuralism and on another on immanence v transcendence. The diagrammatic representation is reproduced below:

Pause and marvel at this for a while. It makes constitutional interpretation bare. While the axes may get convoluted in praxis, the categories and what they signify, remain useful.

Like Prof. Harris elucidates this dynamism inherent in interpretation:

Yet the relationship of signifier and signified is not static….

…Changed meaning in the elements of the polity exercises a conforming pull on the words of the document, and vice versa. Such a dynamism of meaning is the result of the fundamental conjunction of word and power.

He then concludes with his understanding of the enterprise of constitutional interpretation:

…the task of a viable jurisprudence is to keep alive the tensions underlying the system and, in fact, giving that system form and energy; to keep their dissonance in intelligible bounds; and to maintain this constitutionally revealing equilibrium by providing support for whichever component of the opposition is in jeopardy of being submerge.

Intuitive insight captured in an excellent, eloquent and simple paper. Writing gripping theory is hard business and rare in law. Highly recommended.

Citation:

Bonding word and Polity (1982) Prof. William Harris II — Published in the American Political Science Review

Stable link: https://www.jstor.org/stable/1960440

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Study features:

1. Remedial Education of the curriculum from class 3 to class 8 to class 9 students. Three-phase prep — Class 5 and below level, Class 8 level and grade level.

2. Remedial Education of two types: Standard Remediation and Emphasizing flexibility to the teacher and expecting flexible teaching according to a flexibility plan

3. No direct input effects: Implemented during the existing School Day with existing teachers

4. Non-scripted lessons. Daily outlines provided.

Important Caveats:

1. The Average Teaching Experience of teachers in the study is 15+ years. Experienced teachers employ flexibility well and know how to do it better even when not instructed or without using plans, and may even be inclined to do it as a general practice.

2. 70 %+ of the sample take private tuitions, which reinforces what is taught in class with an accentuated emphasis. That casts some doubt on effect sizes.

3. 85% students have literate parents, which might interact with flexible and standard teaching treatments to dilute both.

4. 75% of headmasters believed teachers should adhere to the curriculum, and 95%+ agreed that curriculum was central to teachers’ jobs; the inertia of the curriculum thereby remains high.

Drawbacks:

1. The longer-term outcome relies on a weighted average of class IX and class X marks for class X results because the board exams did not happen. This confounds teacher perception and student performance making them indistinguishable. There is no unbiased instrument available to separate the two effects.

2. 2% attrition—Lee Bounds are presented and are consistent, but caution is warranted.

3. Qualitative Inquiry into Implementation fidelity was poor or nearly absent. We do not know for sure how a standard teaching classroom differed from a flexible teaching classroom.

4. Teachers in both standard and flexible arms embraced limited flexibility, and most did not complete the flexible remedial plans. Only 4% more teachers in the flexible arm felt they had more autonomy as compared to standard arm.

5. It also appears that the program may had limited success in displacing the curriculum, however led to very effective remediation overall.

Baseline Statistics— Class 9 Competencies

Important Outcomes:

1. Remedial Education improved test scores on sub-grade level competence. But grade-level performance in class IX and class X, as measured by a weighted average of in-class scores in school, deteriorated by 0.16 SD. This can be explained by teacher perception or actual student performance but it cannot be stated with certainty which of the two is the likely cause of poorer student scores.

2. Remediation corrected teachers’ expectations to match student reality more closely, which is inherently a good outcome.

3. There was no difference in outcomes across Standard or Flexible Remediation. But nothing more about flexibility and its use can be inferred in absence on detailed observational data on the exact differences in implementation sanctity of standard and flexible remediation.

3. State of Tamil Nadu v The Governor of Tamil Nadu. Also reported here.

   The Tamil Nadu Constitutional Deadlock on the Governor’s blockade of bills passed by the Tamil Nadu Assembly was finally resolved by the Apex Court.

   The Court laid eight issues for decision. Important amongst those were:

   1. When the legislative assembly has passed a Bill and presented it to the Governor for assent, but the Governor withholds his assent thereto, and as a result therefore, the legislative assembly passes the Bill again, and presents it to Governor, will it be open for him to reserve the Bill for the consideration of President, more particularly when he did not reserve it for the President when it was present at first instance.

   …

   5. What is the effect of the expression 'shall declare' used in the substantive part of Article 200? Can a time-period be read in Article 200 in which it is expected for the Governor to pass a declaration?

   …

   7. When the President directs the Governor to return the Bill and the Bill is passed and presented again to the President, in what manner is the President to act?

   The Apex Court reiterated the 2023 State of Punjab v Principal Secretary decision that the governor cannot exercise any form of veto over bills duly passed by state legislatures. The Governor sought to argue that he had withheld assent because he feared repugnancy of state laws with Union law. However, in the scheme of Art. 200, he could have referred the bills to the president when bills were duly presented to him or could have returned them to the assembly with a message stating his reasons for withholding assent. This would enable the assembly to pass the bills with the necessary amendments it deems desirable.

   If, on the first instance, the bills are not referred to the President by the Governor, he ought to return them to the assembly. The court had to decide what to do when bills are passed again by the assembly in the interim when Governor has withheld assent but neither returned the bill nor forwarded it to the president. The court held on the interpretation of Art. 200 that it is binding upon the Governor to provide assent to the bills so passed. Relying on Shamsher Singh, it declared the observation in BK Pavithra on the Governor’s power to withhold assent independently of the advice of the legislative assembly to be per incuriam. The court reiterated that the Governor had no independent discretion under Art. 200 and had to act on the aid and advice of the legislature. The court stressed that there was no absolute or pocket veto available under Art. 200.

   Art. 200 is reproduced for convenience with the operative words in bold:

   “Art. 200. Assent to Bills.

   When a Bill has been passed by the Legislative Assembly of a State or, in the case of a State having a Legislative Council, has been passed by both Houses of the Legislature of the State, it shall be presented to the Governor and the Governor shall declare either that he assents to the Bill or that he withholds assent therefrom or that he reserves the Bill for the consideration of the President:

   Provided that the Governor may, as soon as possible after the presentation to him of the Bill for assent, return the Bill if it is not a Money Bill together with a message requesting that the House or Houses will reconsider the Bill or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message and, when a Bill is so returned, the House or Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the House or Houses with or without amendment and presented to the Governor for assent, the Governor shall not withhold assent therefrom:

   …...” (Emphasis added)

   The Apex court then went a step further, and the ten bills were deemed to have been assented to by the Governor/President in exercise of plenary powers under Art. 142. This is radical because of these ten, seven had been rejected by the President for repugnancy with Union law. The Court still recognised the power of the assembly to make the laws. The Court also laid down a timeline for decision and assent by the Governor. This subsumption of the Governor’s powers under Art. 200 by the Supreme Court is unprecedented in Indian Constitutional History.

   Full judicial opinion is awaited.

   ---

4. Nuclear energy is making a big comeback.

   Amazon, Google, Meta vow to triple Nuclear Energy by 2050. Gen AI needs power. Private AI Companies have already acquired captive Nuclear Sources.

   India appears keen on restarting the Nuclear program with renewed interest. India has a “100 GW Nuclear by 2047” Nuclear Energy Mission. The Budget announcements were a clear signal in the direction of major reforms in the sector. This is central to India’s AI ambitions, and hopefully, the policy momentum will persist.

   The Union Government is considering:

   i) Shifting Nuclear Energy to Ministry of Power

   ii) Opening up to private players

   iii) Amending the Civil Nuclear Liability Act—especially S.4 and S.6

   iv) Amending Atomic Energy Act— S. 3, BJP’s own 2016 amendment to S.14(1A) notified in 2023, S. 22, S. 23, S. 24, S. 25

   v) Increasing capacity within NPCIL and NTPC JVs

   vi) SMR R&D and SMR policy

   vii) A future opening up of foreign investments.

   ---

   Fin.

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Welcome back! A lot has been said and written about police reforms in India. However, some serious empirical input on this issue comes from State of Policing in India Report (SPIR). It’s 2025 version, focusing on police torture and accountability, was released last week. In this post through some charts and statistics, I present a brief picture of policing and social attitudes relating to policing in India.

The purpose of this post is to demonstrate the problems of trust deficit and bureaucratic culture in the Indian police. The Indian Police are very much a product of their surroundings. Therefore, I have also added some charts on police culture and militarism in India. Not all the data on which the charts are based is representative country-wide, but this is the best data we have. Another purpose of this post is to emphasize the need for a national and representative police perceptions and police personnel surveys.

I have mentioned the sample size and relevant survey population wherever it is available. The data is mostly Likert scale, and usual cautions in interpreting ordinal data apply. Each of these reports is worth reading in full; please double-click on whichever interests you.

While sociologists and crime anthropologists have studied these trends in detail, I shall explain them in a separate post soon. For now, let’s move to some survey empirics.

Police

1. Bias in Policing

   a. Marginalised groups, especially STs and Muslims, are more fearful of the police. One must be very cautious in interpreting these results because they are confounded by high geographic concentration and state-level effects may obliterate the community-level effects. Further, sub-sample level national representativeness may not be certain. E.g. In-group bias in the judiciary was empirically unfounded on average, even after many theorists held otherwise. However, they are instructive in understanding common responses of communities.

Source: SPIR, Performance and Perceptions on Policing, 2018. N=15563 from 22 states.

2. Surveillance and Privacy

   a. Many agree to surveillance as the cost for safety.

   

   b. Very few people were aware of their privacy rights. Less than one in five people had ever heard of the K.S. Puttuswamy decision. But people remained deeply skeptical of concerns of privacy and illegitimate access to personal information by police and government authorities.

   

   c. People remain scared of posting their political and social opinions online for fear of hurting group sentiments and subsequent legal action.

   

Source: SPIR, Surveillance and Privacy, 2023. N=9779, 12 states three citites in each and twelve localities sorted by income status in each city. Civilians only were surveyed, not police personnel.

3. LWE and Insurgency-related policing

   a. In LWE areas, people’s perception of insurgency is more sympathetic to the insurgent groups than that of police personnel. But there is consensus that the methods adopted by insurgent groups are wrong. Likewise, differences are also seen in the perception of sovereign functions like taxing and running their own laws also exist between commoner residents and police personnel. This could possibly be because the intensity of exposure to naxal activity is very different for policemen and common people. Otherwise, it is an important reason for training and communication.

Source: SPRI, Policing in Conflict-affected conditions, 2020-21. N=6881. 4605 civilians and 2276 police personnel. This was conducted in 27 LWE and insurgency affected districts and 2 blocks in each district.

4. Working Conditions of Police

   If you read just one report, make it this one. This report highlights very important issues about the service conditions of the Indian Police and their plight in service. A question well-asked is half-solved. This report provides a solid background about the service conditions of policemen.

a. Police personnel in India are highly stressed, suffer from mental health issues, and are overworked.

b. Police personnel get no leaves neither during the year, nor vacations. Their duty-hours are very high and popular perception co-incides with this picture.

c. Senior Officers asking juniors to do private personal household jobs is as common in the Police as it is in the Armed Forces. Given personnel are already overworked, this adds to their burden and may often offend their dignity.

Source: SPRI, Working Conditions of Police, 2019 N=11,834 Police personnel across 105 locations and 22 states.

5. Centralised and Armed Policing v State Civilian Policing, Vacancies

   a. Policing in India constitutionally is a state function and not that of the Union Government. It is enumerated in Entry Two of List Two of the Seventh Schedule. The Investigation and Policing powers available to the Union Government are limited in Entries Eight and 80 of List Two. The constitutionality of the Union Government employing police powers was decided in Navendra Kumar v Union of India by the Guwahati High Court (see discussion here). CBI was held to be unconstitutional. However, the decision was stayed by the Supreme Court in 2013 and has not been heard since. One only wonders what staying a constitutional writ for over a decade means.

   b. In the meanwhile, central police forces continue to grow and have a disproportionate role in law and order and civilian security. These forces originally were paramilitary forces but are not designated as armed police as against civilian police. These are deployed by the Union government as and when required in states.

   c. The SPIR, Policing in conflict-affected areas report referred to above provides us with some details on perception and functional differences between local civilian police and paramilitary forces.

   d. The charts attached below demonstrate that the number of civilian police in India is roughly the same as armed reserve police. Central Armed Police Forces are 10.09 Lakh, add to that 8.87 Lakh District and State Armed Police, making a total of 18.96 Lakh Armed reserve police against 18.37 lakh civilian police. That is an important marker of a militarised, conflict-ridden and police-state.

   

   

   e. CAPF are 37% of the total sanctioned police force in the states in the face of constitutional federal design. Their designation if “other armed forces” and draw substantive power from Art. 355. But the Apex court has never applied itself to defining the scope of the entry “Police” in state list.

   f. As per the BPRD report, there is a vacancy of over 5 Lakh Police personnel in the state police. Also see here. Deployment of central personnel is concentrated in some states, but none of them discharge functions of civilian policing. Civilian policing remains weak and in need of a rehaul.

   For context, the following are the roles and purposes of the central armed police forces:

Source: Data on Police Organisations, 2023

6. Torture and use of force

   a. One in five policemen in India condone extra-judicial encounters. Half the reported encounters were fake. In that light, this latest report is crucial. Too many officers and personnel across ranks justify violence towards suspects. This is indicative of the prevalence of a militarised policing where suspicion of crime itself is sufficient ground for invoking violence. Procedural law is an aberrant inconvenience.

   a. Force without fear is a useful model of policing in a capacity-strained policing. Control of crime and public security dominate fair trial and investigative concerns and take up most time of police personnel. What is seen and reported is acted upon. Crime control is top of the list of priorities. Annual surveys on city-wise crime rates make rounds in every national daily. Incentives do not add up to secure civil liberties and procedural sanctity. One in three personnel also agree, for example, that the lawyer should not be allowed to be present when an accused is examined by the police.

b. Arrest procedures laid down in Arnesh Kumar, 2014 are an inconvenience

c. Violence against suspects is justified across ranks

d. Offence prevention dominates. Regular Preventive Detention Justified.

Source: SIPR, Police Torture and (Un)accountability, 2025 N=8276 Police personnel across 82 locations across 16 states and one Union Territory.

7. Pandemic Policing— Capacity stretch means policing suffers. Police personnel suffer.

Source: SPRI, Policing in the pandemic, 2020-21. N=3607. The study was conducted in one Tier-1 and one Tier-2 or Tier-3 city in each state, and interviewed 240 civilians and 120 policemen in each state.

Militarised Culture?

I understand Militarism to mean the following:

The normalisation and glorification of disciplinarian, totalitarian and combative means and discourse in comprehending and solving essentially civilian political and social problems.

It is also manifest in militaristic personality traits and positions being deemed socially desirable. Employing strong-man adversarial masculinity combined with normalisation of violence in political and social spheres is also an outcome of militarism.

I am not proposing this as a diagnosis. It is merely a suggestive hypothesis. The evidence is mixed and non-representative. Besides, culture is the hardest to comprehend and simplify. But here is the data I will use to shape this hypothesis:

8. Respecting the Army is essential to Indian National Identity

Source: PEW Religion in India: Tolerance and Segregation. N=30,100 dwellings adjusted by response rate.

9. Military Rule is a popular alternative in India

Source: PEW Global Attitudes Survey, 2024. N=3,559 for India.

10. The Army is amongst the most trusted institutions in India, and enjoys higher trust than the courts

Methodologically, this depends on what image the Army generates as a survey prompt. It could potentially remind the respondent of their community-person in the armed forces. But if this is really the picture of people’s true belief, this is a deeply problematic political diagnosis. It risks being the foremost cause of the militarization of ideals and vocabulary becoming normalised.

Source: Politics and Society between Elections, 2019. N=24092 in 22 assembly constituencies each across 12 states.

10. Young Adolescents’ Life Aspirations

a. 28% of male 14-17 year olds aspire to be Policemen and Army Personnel in Rural India. If we exclude the respondents who don’t know, it is 35% of young adolescents aspiring to join the army and police. One reason, doubtless, is financial security. But it remains a respectful and glamorised professional choice.

For a detailed city-wise report, see table 52 on pg. 67-68 in document linked above. Figures for Uttarakhand and some North-Eastern villages are peculiar in their bend towards working in Army.

Source: ASER 2023. Aspirations of Adolescents. N=30,000 youth in 28 districts with 60 villages in each district. Two-stage sampling.

b. The proportion falls in some smaller, less representative and urban-rural mix survey of 15-34 year olds

Source: Indian Youth in the Post-Pandemic World. N= 9313 youth between 15-34 years of age. Urban and Rural Localities.

11. Google trends show the Army and, Police are more popular searches than Modi

Google Trends search results also reveal some important things about these trends. I encourage you to toy with it and draw your conclusions.

I found that the army and police were more popular searches than Bollywood, ShahRukh, UPSC, gold price, jyotish, vaastu, Modi and BJP. Army and police were often accompanied bharati, job, but also videos, movies and wallpapers. YouTube searches are also instructive.

The Army is most searched in these states. These are states where joining the army is a very popular and culturally celebrated vocation (Himachal and Uttarakhand) or where the Army has an active presence.

Finally, I now urge you to look up these Wikipedia stubs on Military Films in India and Police Films in India. Think about all of these you have watched.

Will we ever move to modern civilian policing that has burdens better than crime control? Policing in India remains a stressful and difficult job. The admixture of civilian and armed policing is lopsided and flawed. People fear the police and are also likely to be subjected to biased policing and extorted by the police.

We need a country-wide assessment survey of officials, and on public perceptions about the organisation in all branches of public bureaucracy, but especially, in police. If a trust-deficit-crisis is to be avoided and further descent into a police-state is to be thwarted, a thorough and representative survey that helps us diagnose the crisis is a necessary first step.

Fin.

About the book

In writing about the challenges of Indian Schooling, I previously alluded briefly to the challenges of State Capacity. Yamini Aiyar’s new book on frontline bureaucracy in education double-clicks onto this problem by studying bureaucratic experiments in Delhi Government’s Primary and Secondary Schools. The book is rare for its careful focus on the frontline bureaucracy, on which the literature is thin. The other literature, e.g. Natarajan, has focused on a macro-review of capability and capacity problems. The book seeks to “unpack how the state sees, talks and commands itself into implementation”. It encapsulates a competent review of theories of state capacity.

Pritchett’s summary of the book

1. To get frontline to hear you saying something different you have to say something different.

2. One also has to say it differently. Further, one has to prescribe “what to do”.

3. Send clear directions with training and support to the frontline.

4. The middle bureaucracy muddles, focus thereafter on the middle.

Axes of intervention

After distinguishing capacity and capability, Yamini discusses autonomy— from local elite, higher bureaucracy, from circulars and compliance cultures, political demands, particularist demands and competence— in exercising moral agency, efficiency, in using discretion, effective feedback mechanisms, and accountability. She squares these off with the tensions between organisational purpose (what James C. Scott called Metis), supportive management of teachers (Y-management) and legalistic compliance-based modes of accountability (X-management).

Source: Link

Education is a complex social process. Its essence is in each school operating as a firm while exercising substantive local discretion to cater to the diverse learning needs of the classroom. (This idea is explored here) However, providing this in a bureaucracy with a legalistic culture is difficult because it errs on the side of a Theory-X style bureaucracy. Yamini’s book captures this in her experience of the “tyranny of the circular” in her study of Delhi schools: what Hull calls Kaaghaz Raj. Even senior teachers struggle with ‘interpreting’ circulars, especially circulars that confer ‘discretion’. Flexibility troubles them. The schools under study in Delhi received 128 to 342 circulars in one year! Over three years the Education department had issued 8,763 circulars!

Delhi appointed Mentor Teachers across school clusters as “principled change agents” to breathe new motivation and allow a new pedagogic culture with a new teleological orientation to percolate the schools. They sought to reinvent circulars, to use them to different ends guided by a renewed idea of learning. However, teachers tended to seek clarity rather than flexibility. Experience and research have also shown that the level and structure of instruction useful to a teacher in the classroom vary with the extent of teaching experience and training quality. A more experienced teacher wants more discretion in conducting her classroom, while a younger teacher would like more instruction.

One of the most difficult cultural artefacts to alter in Delhi, according to Yamini’s account, was the adherence to the syllabus. When classes were separated by learning level and instructions were circulated to teach at an appropriate level of learning across classes, teachers often taught the same syllabus at different paces across these classes. Syllabus remained the deeply ingrained holy cow of the education bureaucracy. It was reinforced further by high-stakes examinations, which were reported in the news and were favored by the education bureaucracy as a standard of review. Curriculum remained the standard for “weak students”. The schools kept “defaulting to the familiar” when they couldn’t interpret flexibility. Scolding by the DDE for not being faithful to any circular was a common fear.

Changing the focus of training and seminars to shift teachers’ perspective from “child can’t learn” to “I can’t teach” was also attempted with reasonable success. Mid-level bureaucracy was put in touch with Mentor Teachers to slowly allow the reform thinking to percolate through the bureaucracy. Another important prong was changing social attitudes towards teachers and teaching. This has been discussed in greater detail in Shiksha authored by Manish Sisodia, as his account of the Delhi reform.

History and Design

In the design of the Indian Bureaucracy, there is a tension. The post-independence bureaucracy, in its design, strived to evade particularistic local demands and elite capture, but at the same time sought to be locally embedded. This historical anxiety has been explored previously (Yamini and Krishnan, for instance). Yamini draws our attention to how this pans out in bureaucratic management. It emanates as a force that limits the discretion of local bureaucracy to facilitate effective “control” by the higher executive with a “transformative political agenda” that demands seclusion from the local population and disables effective local and decentralised accountability. It is now a trite proposition that the 73rd and 74th constitutional amendments sit uncomfortably with this design, and this has rendered the Local Body Institutions dysfunctional w.r.t. finance, capabilities, manpower, elections, and legislative autonomy.

Yamini also traces the centralised bureaucracy to its colonial history and the inertia of this Weberian system to propagate legalistic top-down compliance. Such bureaucracy, however, is increasingly an anathema to complex development goals requiring local, iterative and adaptive intervention. She shows how the Delhi Government attempted to circumvent this challenge by creating a parallel chain of command to allow the reform effort to bypass traditional local bureaucracy rather than trying to tackle the culture problem head-on. They used this parallel appointment of mentor teachers with strong discretion to strengthen flexible decision-making, attempt to alter the nature of accountability and repurpose and reorient the teaching cadre.

She also examines how changes in the Education Policies further sharpened this wedge between control and discretion. This part of the book provides a circumspect view that the problems are as old as the system. Important among these was (i) the increasing dominance and importance of high-stakes testing (ii) state governments resist decentralisation to avoid diluting control (iii) The active neglect and funding starvation in SCERTs (iv) overbearing regulatory scope in private schooling (v) teacher accountability was a permanent anxiety animating early discourse on schooling, further entrenching the emphasis on compliance (vi) School building, consolidation, class size, infrastructure and ideal school also dominated thinking. Finally, there was the problem of an overambitious curriculum and misaligned pedagogy.

Theories of Flailing State Capacity

System characteristics of Delhi Schools— My summary of Yamini’s arguments

1. Rule-obsessed, circular-led, disciplining-plumbing style administration

2. Top-down accountability, not discretion

3. Poor Embeddedness of the middle bureaucracy with loose local accountability

4. Flawed organisational purpose reinforced through the syllabus-exam nexus

                                            +

1. Low intrinsic motivation of teachers

2. Teacher perceptions about students, school bureaucracy and telos

3. Poor, bad quality training pre- and post-appointment

4. No supportive mentoring and constructive feedback

                                           +

1. Lack of agility and connection to organizational purpose

2. No Understanding of “flexibility”

3. Low Capacity and Capability to utilize flexibility

                                          =

1. Failure in reversing sustained bureaucratic inertia

2. Failure to sustain Mission-Mode implementation

Successes and failures

Source: Samagra

The Sticky bunch— Reform vehicles in Delhi that worked partially

• Mentor Teacher as the Principled Agent of Change to pry open the door for altering the bureaucracy

• Using Circulars Effectively, while acknowledging that they remain undeniably central to schools

• Periodic Mission Mode implementation to recharge the cadres

• Integrating the existing bureaucratic apparatus into the teacher

• Patiently sticking to ideas and the mission despite sustained resistance.

• Political will drove organisational purpose to have a slow and effective shift of metis, seen prominently in post-COVID-19 remedial follow-up visits.

• Flattening the hierarchy to make discussion possible and improve participation.

• Improved and participatory teacher training and recognition of teachers and their efforts.

The Stubborn bunch— Issues that did not budge

• Limited change in syllabus-orientation of teachers and bureaucracy

• Limited decline in the importance of exams

• Continued compliance culture and reliance on circulars

• No reduction in the inertia exerted by the middle bureaucracy

Given there was abundant political will, the goal was to optimise effort and time. Inertia and culture remained the most difficult challenges. The challenge is majestic because it requires pulling a comatose system into a shooting star system and then pushing for capacity reform till it progresses on capacity. The Jury is out on whether these reforms were as successful as they had claimed to be. But, they remain the most multi-pronged and committed reforms that have been carried out yet in Indian Schooling. They also remain a crucial roadmap for reforms focusing on the frontline bureaucracy. Yamini and her team emphasize the importance of front-line workers and middle-level bureaucracy and capture those valuable lessons for. It remains to be seen if the institutional structures and culture shift sought to be created are sustained.

Theoretical Questions that survive

1. How do we repurpose a bureaucracy? Is there any virtue in employing legalism in development bureaucracies generally?

2. In democratic developmentalism, where public participation is poor, how do we ensure accountability while preserving decentralisation?

3. How does administrative law balance“constrained by the law and therefore against the grain of it” and “within the frame of law and allowed by discretion”? Is legalism an essentially conservative force because an activisty judicial review leads to risk aversion?

4. Is it theoretically possible to devise rules to allow leeway for developmentalism and regulation and decentralisation? How do we think about bureaucratic inertia for compliance with rules?

5. If there is an essentialist obsession with regulations and compliance, everyone will want decentralisation only up to their level. How to then politically decentralise with rules still existing?

Earlier today, Gulzar Natarajan recommended that we collect learning assesment data through longitudinal survey studies representative at the block level conducted by independent assessment agencies.

This has already been prescribed in some detail by Karthik Muralidharan in Chap IV of his book Accelerating Development, generally for all development outcomes and specifically for education in Chap. XI.

Such measurement of learning would be an excellent first step in diagnosing the problem, setting a new benchmark and signaling a clear shift of organisational culture away from curriculum to learning.

Thanks for reading!

Law

1. Prof. writes on Regulation in Knightian Uncertainty

   Prof. Cass argues that in the presence of Knightian-Keynesian uncertainty where probability configurations are not understood; regulators should proceed cautiously, learn slowly, apply the maximin loss-averse rule and sleep well at night. Cass quotes Keynes's three-fold solutions—rely on history, presume existing signals have gathered the related possibilities, rely on collective wisdom— and then proceeds to reject them, again following Keynes. The principle of insufficient reason is also then summarily rejected as arbitrary. In uncertainty, the unknowns are not equi-probable and there is no reason to presume the same.

   GLS Shackle happens to be my favourite exponent of uncertainty. I previously wrote about his work in the context of uncertainty here. Shackle lays bare in much careful depth the pure theory endeavour advanced by Knight. He adds the importance of distinguishing probability as a way of thinking from probability as a class feature, following Mises. But his account is criticised as nihilistic, how do we choose?

   Cass is also sensitive to the argument that spending on the safety of black swan failures is politically expensive unless there is near consensus on the extent of devastation ex-ante the event happening. He suggests we can use maximin only when little is lost from following it. But, that is precisely unknown. Theoretical predictions must guide any probability modelling of particular safety behaviour, and we thus descend into an infinite regress. Cass proposes that we deploy Maximin. He says we employ subjective probabilities to produce a crude cardinal ranking of potential outcomes under uncertainty. Cardinal rankings are possible in regulatory contexts, he suggests. (I disagree, see below d. for example)

   This has already been argued by Shackle in his book. (See Epistemics and Economics, Chap. 34)

   He suggests we use rule-of-thumb probabilities, or on occasions even without explicitly assigning probabilities. We are guided by collective experience and practitioner expertise. We have to often cross the river by feeling the stones. What is hard for a perfectly predictable, frictionless system is worse in a social system modulated by efficiency concerns—law, economic policy for example. One question though always remains: at what point does such decision-making stop being a full rational profile/description of choices?

   Confucius left us with sage advice: “When you know a thing, to hold that you know it; and when you do not know a thing, to allow that you do not know it; —this is knowledge.”

   Related:

   1. What Cass’s argument means is that sceptical empiricism is the only scientific approach to uncertainty. Platonic, romantic grandstanding and haphazardness can be damaging in the abundance of leptokurtosis. (See p. 284 of the Black Swan, Taleb N.)

   2. Think: Is loss aversion bias an appendage of uncertain decision-making? Or is it that our loss floors have now shifted?

   3. Conservatism is also the growing norm in uncertain-time monetary policy for example. There is also a growing conversation about conservatism in uncertain environments in economic policy-making of fragile systems. See this paper ‘easy money is no free lunch’, and Rajan R.’s book on unintended consequences of monetary policy. Also, see his lecture on the book here.

   4. One of my favourite papers on this, which Rajan refers to, is this study of the history of monetary policy. It is a phenomenal paper, studying 87 instances of financial recessions affecting banking systems over in 17 countries over 150 years. They demonstrate an eerie pattern of banking crises which are triggered by long rate cuts followed by sharp rises—what the authors call U-shaped monetary policy. Asset prices shoot and then bust suddenly. The entire paper is worth reading, but stare at the graph long and hard. These are unintended consequences of operating in uncertainty, they also correlate with bank stock returns and profits. The authors also employ the trilemma instrument to demonstrate the conditionality of crises on long periods of cuts or low rates before the hike, leading to expectations of a particular regulatory environment and moral hazards.

      

   5. Mises developed the Knightian idea in Chapter 6 of Human Action. These ideas remain central to understanding entrepreneurship, theories of firms, and technological change. But, combining a conceptually purer theory of Knightian-Mises uncertainty and theory of value, Shackle gives a powerful conceptual tool in horizon-agnostic economic analysis of varying uncertainty by declaring that reason must compromise with time. (See chapters 26-35).

   6. If you believe the disputed Taleb thesis, the modern world is likelier to experience black swans—rare high-cost outliers—because complexity means more fat-tail leptokurtic distributions.

   

2. Hart’s lost essay was published in HLR and makes important observations relevant to law and economics.

   “Of course the fact that decisions are about the scope of an existing abstract right means that the Courts do not approach their task of decision as act utilitarians and decide each case solely by reference to utility, but this only means that rights have some weight or count for something in a system where legal rules confer rights.”

   - Policy, Principles and Adjudication, Hart H.L.A.

   Hart demonstrates that judges deciding hard cases based on arguments of policy is neither undemocratic, nor inefficient, nor unfair. If one merely reframes arguments of policy in some policy-oriented cases as arguments that determine the “scope of rights” it doesn’t take away the soul of the purpose of the enquiry, namely that it has a utilitarian and consequentialist underpinning. This diluted version of rights that is only an anchor for decision-making would only admit that rights count for something (they are not absolute) and judges do not act as plain utilitarians. The judge’s sense of appropriateness might derive from policy and not only rights.

   Questions that I am pondering upon:
   (i) Are all policy arguments necessarily moral? Can a decision ever be purely utilitarian without there being an underlying norm captured as a right or by some other conceptual category? Wouldn’t such a decision be an infinite regression sans an Archimedean point? Is some version of a right based in principle a defining feature of any norm-based social organisation?

   (ii) At what point does employing a policy argument amount to lawmaking? Is strong discretion necessary for making policy arguments?

   (iii) What is the essential distinction between policy in its reference to a moral value and a right in its reference to a moral value? Is it only to be wrapped in a vocabulary of substantive justice, like Sandel would or Dworkin would?

3. Warren and Brandeis on Right to Privacy and its limits, writing in 1890! Sheer foresight.

   “The right of one who has remained a private individual, to prevent his public portraiture, presents the simplest case for such extension; the right to protect one's self from pen portraiture, from a discussion by the press of one's private affairs, would be a more important and far-reaching one. If casual and unimportant statements in a letter, if handiwork, however inartistic and valueless, if possessions of all sorts are protected not only against reproduction, but also against description and enumeration, how much more should the acts and sayings of a man in his social and domestic relations be guarded from ruthless publicity. If you may not reproduce a woman's face photographically without her consent, how much less should be tolerated the reproduction of her face, her form, and her actions, by graphic descriptions colored to suit a gross and depraved imagination.”

1. Economics

   1. Let the rupee fall

      Arvind et. al, in a series of three articles, argue that the rupee needs urgent depreciation. The artificially appreciated rupee hurts us and exposes us to unwarranted risks. Sajid has argued this before, and so has KP Krishnan.

2. Since 1991 we have allowed a free hand for the exchange rate with minimal interventions on three principles. 1) Allow depreciation by capital outflows that are not abrupt 2) Allow appreciation on account of import competitiveness and rise in productivity 3) Build reserves from inflows to tackle exchange rate crises; rest laissez faire. Ila’s excellent paper on India’s exchange rate regimes is highly recommended for context.

3. What is happening according to Subramaniam et al.?

   1. The RBI has changed its exchange rate policy regime. The exchange rate has been nearly flat for about two years and has not been allowed to depreciate (See the chart below). This has been done by exhausting reserves in the spot exchange market, non-deliverable futures market, and more direct and drastic control using regulatory powers! The latter two are unprecedented and extremely risky. The rupee has been virtually pegged to the dollar and the rupee is closely tracking the movement of the dollar.

   

   2. The dollar in real terms has appreciated and most other emerging economy currencies have depreciated in response; except the rupee. This has hurt exports and cost us a ballpark, 5% of growth in two years, relative to what could have been possible. This, was while we had loaded reserves necessary to tackle capital flight.

   3. NDF foreign market transactions have been resorted to because trying to peg the rupee by selling dollars in the domestic markets dry-up liquidity and control is difficult. The liquidity fell below the recommended 1.2% of NDTL more than once. The RBI recognised this and cut CRR by 50 bps. NDF transactions are convenient because they allow one to settle the difference in dollars in foreign markets without disturbing domestic liquidity.

   

   4. An overly appreciated rupee is also susceptible to a run on the rupee leading to a drastic correction. Such a thing is modulated by the RBI's attempt to drop speculative volumes by requiring users to explain contracted exposures in onshore markets on speculation. But the RBI also tried to (which is an insane leap) regulate speculation on the offshore NDF market! Given how sharp the depreciation has been relative to other countries, the pressure on the rupee can worsen very fast, RBI is pining that the pressure eases before it is limited either by reserves or liquidity concerns. Oral instructions to banks to settle transactions in non-dollar currencies and other interventions in the currency market through regulatory power are worrying trends.

   5. It is also difficult to understand what is the anxiety driving this stark break from the past. Taper tantrum anxieties according to me the most plausible explanation for the de facto peg. Rajan has theorised this in his book pointing to the limits of flexible rates. As the FED cuts rates, if receiver countries allow flexible appreciation, they draw even more capital and have sharper appreciation in turn. The reason for manipulation is therefore macro-prudential, often as in this case, even at the cost of real economic targets. Sharp appreciation lays the seeds for fragility. Tighter domestic policy to reign prices also leads to domestic corporate borrowing chasing cheaper dollars which has then to be directly regulated or it fuels the appreciation. A sterilised purchase itself is also contractionary in the long run, adding to the firm-borrowing. Leverage builds up substantially and when the source country raises interest rates after a sustained dip, the receiving country's bank and firm (some evidence here) balance sheets get sudden undue exposure. Equity flight forces a drastic correction. The correction in the Fx itself is damaging through various channels and forces a sharp policy rate hike. Any sustained dip by the source country makes the receiving country reasonably anxious about the dip as well as the rise that follows and it is compelled to take away the volatility of its currency. However, stabilising the currency has to be accompanied by sterilisation in the domestic liquidity market, which erodes control over liquidity and affects banks’ financial positions. (See p. 45-47 in Monetary Policy and its unintended consequences)

   6. It appears in this case that we may be depreciating the rupee gradually, but it remains to be seen (see chart below, starting in October). Liquidity is in record deficit and was there all of December. Banks are worried as the short-term lending rates are at a four-year high and seek Forex swaps. It remains unclear whether the volatility is driven by month-end demand, closing of positions and other contingent factors or is a change of stance by the RBI. Clarification is awaited from the new guv. With tax outflows starting, more pressure on the rupee, and a neutral rate stance by the RBI, until budget spending kicks in; the RBI has to rush to its tools again. Once we have a better sense of food inflation and how the Rabi is tempering it, we might be in a position to affect a rate cut in February easing some liquidity constraints. But, the RBI also will have to square off the unprecedented open forward positions.

   

4. Data Salad from the PMEAC on Passenger movement, calling it migration (Link here)

Blue-collar, marriage-related and other movement trends (not migration) within India using the Unreserved ticketing data on railway passengers’ second-class travel and roaming data (which is a little more problematic) was sought to be studied in this paper.

1. The following problems are evident:

   1. The paper seems to have confused transport and movement with migration and the two are indistinguishable in the paper. There is no comment on the distinction and definition of predicted migration flows as separate from passenger flows. It seems as though the paper presumes that at least a large proportion of all second-class unreserved travel is migration! That is a fatal flaw. While the caveats are identified they are not addressed. The paper lands on the finding that

   75% of migration flows are within 500 kms. 40 crore migrants total, 8.5 pp decline(!?) in migration.

   2. The paper is studying the passenger flow of 2023. It’s not hard to imagine people who migrate and stay longer than a year. Census migration studies studies migration by place of birth or usual residence. Only 8% of people had migrated in the last year in the 2011 census.

   3. Circular migration within the year is unaccounted for.

   4. It is hard to derive anything about migration using passenger data unless it is an identified panel of travellers, otherwise using cohort-based dyadic gravity models can lead to difficulties. Much care is warranted unless full migration histories are available. See this discussion by Rees on the empirical analysis of migration using the Ravenstein framework.

   5. The ticketing system serves 2 crore passengers daily and has voluminous data. The data used is only for travel more than 150km as described in the railway data; The dyads are only station-station and not city-city. Further, calculating net flows to a city/district is challenging. e.g. Valsad often occurs as a popular destination but Valsad-Mumbai is one of the most frequented routes, and Valsad is only an intermediate destination.

   6. The explained variation of 2011 Census migration data by proximate time passenger data is high. But that could only be because of the direction of migration and movement is to urban centers which are visited for other reasons. The census estimated 45 crore all-time all-cause migrants in 2011.

   7. We cannot even loosely infer that these flows are migratory by circumstantially relying on the seasonality of flows. The peak is in May-June and November-December which are festivals, holidays, agricultural seasons, and everything else. All major economic time series blips in those months.

   8. It would have been useful to have a split of seasonality by inward and outward travel correlated with some economic outcomes/ ranked to know if it was a gravity model at work. It would also have helped to have separate charts for intra-state and inter-state flows by distances travelled.

Nevertheless, here is a chart on passenger travel. In ten years, we haven’t added any new popular stations, states, or destinations for travel :

3. The year 2024 in charts from Gulzar Natarajan. We have surpassed 1.5 degrees of warming above pre-industrial temperature. Indian equity was amongst the best asset classes in the world. Key Development Challenges from the World Bank.

4. Let the students fail classes, remediation is essential

   The centre allows detention of students in class 5 and class 8; remediation is recommended. Evidence suggests detentions do not affect learning outcomes. Does it act on teacher motivation and dropouts? But, we don’t have robust evidence yet. For now, we are riding on the logic that when we catch a fever, trashing the thermometer is not a solution. Eighteen states and two UTs have already scrapped the policy after a 2019 amendment. Expulsion is barred, and students must get remedial education.

Law Update

1. Commercial Courts Amendment Bill— If wishes were horses, beggars would ride

Commercial Courts Bill seeks to amend the Commercial Courts Act 2015 and Civil Procedure Code— Draft released for public consultation. Following is a summary of the proposed amendments:

a. Enabling state government to create/designate dedicated commercial courts for arbitration [S.3, S.10 CCA]

b. Shortening delays

The filing limit for written statements is reduced to 60 days[Order V CPC], Judgment is to be delivered within 60 days of the conclusion of hearings[Order XX r. 1], Discretion to the court to impose costs including progressive costs for adjournments [Order XVII r.1], adjournment for parties who have been granted injunction made more difficult [Order XVII r.1], Injunctions to be disposed of in ninety days—if without notice matter to be disposed of in thirty days [18A CCA], non-appearance post adjournment can empower the court to grant ex-parte decrees[Order IX r. 7A], All procedures post an application for execution of decree to be executed in twelve months[Order XXI, r. 10A]

c. Other

Technology integration facilitated and mandated [S. 26, CPC; Order XX, Order VIII, Order V, CPC; S. 19, 19A of the CCA, new definitions], Reinforcing that interim relief shall not interfere with pre-institution mediation- in case interim relief is sought and granted or refused — pre-institution mediation is mandatory [S. 12A], the Bar of limitation on appeals may be relaxed in extraordinary circumstances [S. 13 ACA], S.13 appeal conditional on prior notice[S.14 CCA], Conciliation was deleted given the new act on Mediation.

Related links

1. The Commercial Courts Act in 2015.

2. There are at present 67 commercial courts — 49 of which are in Delhi— in the country. Good data for economists to toy with.

3. Their functioning is discussed here

2. Arbitration Act Amendments

Furthering the momentum on amending the ACA,1996 in light of the earlier report by B. N. Srikrishna and the new report submitted by a committee headed by T. K. Vishwanathan, the ACA amendment bill, 2024 has been proposed.

Many perspectives have flown in since. Some argue the amendment provides clarity, and some suggest “Don’t fix what ain’t broken” (1, 2). Here is my favourite breakdown (1, 2). Amidst this, there are also murmurs about the government's anxieties on the rising costs of arbitrations to which it is a party and recent judgments including one invalidating unilateral appointment of arbitrators.

Some key changes:

1. Redefining arbitral institutions to promote institutional arbitration—freeing arbitral institutions from court approvals; Clarifying seat and venue; Introducing an emergency arbitrator as was recognised by the Supreme Court; and amending the act to streamline and expedite the process.

3. Sambhal and the Places of Worship Act

Sambhal violence reminds us, that the Places of Worship Act is central to peace in present-day India. Gyanvapi's judgments allowed the surveys of the alleged Shiv Ling and have kept the pot boiling. Meanwhile, the SC has prohibited any court from registering suits and passing any interim or survey orders in any matter about the PoWA, 1991.

When the Gyanvapi survey order was appealed in the SC, the SC allowed the survey. After heaping praise on the PoWA in the Ayodhya Judgment, the Ex-CJI orally remarked during the Gyanvapi proceedings that PoWA was no bar on the survey and determination of the historic religious character on 15th August 1947. PoWA only prohibited suits and claims of conversion. The SC then also allowed a “non-invasive” survey. This certainly has great potential for conflict using a practised script.

4. Some interesting articles

1. S Rajagopalan reminds us of the travesty of the victims of the Bhopal Gas Tragedy. [Paper]

2. Equities or equitable interests? Which should supersede? An 1861 judgment whose reverb still permeates, and the confusion that still survives. What were Lord Westbury’s intentions in Phillips v Phillips?

Economics Update

5. The Unseen Behind Unconditional Cash Transfers — Part-I

Following Rajasthan, Madhya Pradesh and Maharashtra, now, Delhi too has announced an unconditional cash transfer to women. I wish to make two arguments about why cash transfers are so salient in the first part and then understand the fiscal consequences of Ladki Bahin Yojana in MH.

The Nabard survey on financial inclusion in rural India points to some data which in my opinion would explain why cash transfers are working:

1. Extent of indebtedness

55% of agricultural households and 52% of all rural households are indebted. One in four houses have non-institutional loans. The average debt of indebted households is upwards of 90,000. Even if indebted households match average consumption they have about ten months of consumption worth in debt [principal only] to repay. In contrast with the 2016-17, the 2017-18 survey suggests a visible increase in indebtedness in some states, albeit consumption expenditure has also increased. Carefully also note the state-level variation.

Steady growing rural household income — But drastic fall in % income from Manual Labor, very slow growth in income from cultivation

Source: Calculations based on the NAFIS Surveys 2016-17 and 2021-22. Real Monthly Income

A 7% CAGR for real income in rural India is in keeping with GDP growth overall. The caveat is that income measurement is fraught with challenges and limitations. One interesting observation from NAFIS is that the proportion of total income from Manual labour for both Agricultural and Non-agricultural HH has fallen from 43% in 2016-17 to 20% in 2021-22 (26% for non-agricultural households). The average income from manual labour for the rest has also crashed. Roughly 20% of the income of the total has shifted to government/private jobs or other enterprises. Either the data seems erroneous or we are missing a major structural shift.

What is the most worrying is that growth in real average income from cultivation was a meagre 1.35%. Rural wage seems to be dipping and people are exiting manual labour in search of other jobs or no jobs and very high youth unemployment. This is consistent with other accounts— from Labour Bureau data for example.

This chart below showing Real Wage in Rs/day will give any economist nightmares. Jean Dreze is writing here, here:

Source: Dreze, Ideas for India

6. The Unseen Behind Unconditional Cash Transfers- Part II

The Ghost of Ladki Bahin Yojana will haunt Maharashtra.

The Mukhyamantri Mazi Ladki Bahin Yojana promised to give Rs. 1500 per month to all. Ten million beneficiaries were anticipated. However, the land ceiling limit of 5 acres for the eligibility of beneficiaries was removed. If the husband was domiciled in Maharashtra, the woman from any state marrying him could benefit. The age limit of eligible women was increased to 65.

The total number of beneficiaries now is 2.34 crore! Some officials suggest that 15 million beneficiaries from other schemes like the one for retired unsupported women have “crept into” the scheme leading to duplication of benefits. Some argue that the checking was lenient, which I can attest to.

As it stands, the scheme is set to cost 46,000 crore rupees per year : 2.34 crore*18000=42,120 crore. Add to that 10% interest. The government plans to further increase it to Rs. 2100, leading to an expense of 55,000 cr. This is maniac and unsustainable. The government also spent 200 crores on advertising the scheme.

For contextualising those numbers here are some figures from the Budget, Economic Survey :

1. If Ladli Behena Yojana were a ministry, it would have the second-highest outlay.

2. The debt-GDP ratio of Maharashtra is at 17.6% which is excellent fiscal health, the FRBM act prescribes a limit of 25% for states.

3. The fiscal deficit previous fiscal year was 2.8% and jump up from the year before, given it was a pre-election year.

4. The total capital outlay by the government on buildings, roads, bridges and all else put together was 57,000 cr. The spending on Ladli Behena Yojana is 15% of all development expenditures.

5. The spending is completely non-discretionary and twice the health budget or the social welfare and nutrition budget in Maharashtra. The amount equals water, sanitation, housing and urban development budgets put together.

6. The Maharashtra Government could have attempted to build cities that are well-financed and cities that work. Here is a menu card of things we could have spent on:

Source: Economic Survey of Maharashtra, 2023-24. The table shows Total outlay i.e. Captial+Revenue outlay.

5. If it costs about 250 crores to build a medical college and 2.5 crores per month to run it, we could have built one medical college for each of 36 districts and run them for 20 years including interest costs. One in each district of Maharashtra in just one year's worth of Ladki Bahin Yojana’s spending.

6. Here are Maharashtra’s nutrition outcomes where there is so much we could have done with that money:

Source: Niti MH, Health Profile

7. Neeraj Hatekar and Savita Kulkarni remind us of the worst rural deprivation in Maharashtra, worse than other counterpart states. The ratios of relative district incomes are worsening, quality of public infrastructure in rural Maharashtra is very poor. Multi-dimensional poverty in Nandurbar is as high as 33%. Block-level outcomes are much worse. Tribal development budgets could have also benefitted directly from this money.

8. Over five years at 8 pcpa interest rate, the government of Maharashtra will have spent 2.91 Lakh Crore Rupees on the scheme. On increasing it to 2100, the government would’ve spent to the tune of 3.41 lakh crore rupees on the scheme. At 10% nominal growth rate and supposing the interest and principal due in each year is paid from revenues; the fifth year principal and accumulated interest of five years will amount to 1.5% of GSDP.

9. If the entire scheme were debt funded, by the fifth year, Maharashtra Government would have added to its debt stock [at 10 % nominal growth and 8 pcpa interest rate] 5.7% of the SGDP. Overall, 23 ish %, well under the 25% threshold but only if everything goes right. The headspace available from extra growth for discretionary spending is soaked away substantially. Maneuvering space on fiscal deficit remains narrow. If Maharashtra runs the scheme for ten years completely debt-financed (which will happen unless other expenses don’t grow proportional to GSDP) without changing anything else, it will risk a 8.9% increase to the debt-GDP ratio.

10. Reducing Debt-GSDP ratios, especially when counter-cyclical policy is much needed is a painful process.

This is an interesting experiment where the State is spending more on Unconditional Cash transfers than capital outlays. How this pans out remains to be seen. Will this save rural consumption from the ditch? How long will the scheme continue? Will this set-off a competition for cash transfers? What will this do to politics? Will Maharashtra slow down on building capacity of spending and governing? All things remain to be seen.

7. Conquest? Spurious correlation can be dangerous

[“How is this economics?” caveat applies, but this is important. ]

Dr. Evans hypothesizes that conquest is a good possible theoretical explanation for the growth of honour or izzat associated with the chastity of women in turn associated with a relatively low Female LPR in Bihar and UP. She makes a visual inspection of ancient statues in Bihar and finds that post the 14th century, the figurine representation of women has changed and they are much more chaste thereafter. After giving the necessary caveats she locates gender divergence in “conquest”.

We should be cautious because the literature might tell us a different story.

Such inferences can be perilous in deep-divide societies and researchers ought to be very meticulous. While the observation is valid I disagree with her reasoning on the theory of conquest for following reasons:

1. A.S. Altekar, a nationalist historian, in his renowned volume on the position of Hindu women concurs marshalling primarily literary evidence that purdah spread with Islamic invasion; but, argues that the spread of purdah was common and simultaneous over Rajputana, Bengal, UP and Bihar and happened at a wider scale in UP and Bihar only in the early 16th century. The 14th-century UP-Bihar theory that Evans proposes is too simplistic to hold ground. Altekar also argues that purdah was initially limited to upper-class women before it took firm root.

2. When exactly purdah took root and was popularised is disputed and hard to prove. RS Sharma traced it to the Delhi Sultanate in the early 1200s, and some others to a later period. Evans’ inference also confounds with the gradual strengthening of the Tughlaqs who amassed control over an extensive tract of India in the late 14th century far beyond UP or Bihar and if they enforced purdah it must have gone all over the country. Khaljis, before Tughlaqs did not control Maithil and other regions of Bihar. During the 14th century, Khayarawal, Oiniwars were said to have ruled parts of Maithil and Bihar but little is known about the dynasties.

3. Altekar further notes that some seclusion of women-expectations of reserved behaviour, and restrictions on movement were not uncommon in ancient Hindu India. Altekar traces this to a reduction in age at marriage from 15-16 years to immediately after puberty which he happened in late Vedic and early Christian period: the rise of Dharmashastras and Smriti-kaars in the 4th century BC seems to have marked this shift. Sati, Niyoga, and dispossession from heir-ship all therefore predate Islamic invasion. A close reading of Arthashastra and the Manusmruti will also give this away. Reduction in age of marriage according to Altekar accorded more control and power to the husband. This in my opinion more properly constitutes the beginning of the elements of honor and izzat in Hindu Society much before the Islamic invasions.

4. When speaking about topless figurines in the book, he also distinguishes the sculptor’s imagination and upper-class tastes in art from the life of the people by citing contemporary literature to demonstrate that the artistic depiction of nudity and eroticism may not be representative of popular belief about norms around eroticism. In so doing he denies alternate challenges to this theory that the literature is limited and Brahminical, or these figurines were made by Dravidian sculptors whose style was markedly different, etc. He also disputes the linear understanding of the evolution of nudity by pointing to other older nude statues in Gandhara style. We should be much careful in making inferences about public life through the evolution of surviving art.

5. While Altekar’s writing is criticised (See here a scathing from Uma for example) for advancing a romantic and tinted view based in Brahminical sources and national pride, his engagement with the literature is still extensive. The idea that the access of women to public spaces was restricted even before the advent of Islam in India is also accepted by Altekar’s critics. See here for an example.

6. Though I may be wrong, the bronzes in the post shared aby Evans are likely Pala bronzes dated to circa 10th century. The Pala empire ruled over that part of Bihar and it ended by the mid-twelfth century and with them likely their art forms too perished. Further, comparing figurine representations with imagery is hardly proper. Figurine representations of several Goddesses continue to bear weapons and are much akin to older representations.

7. Nude representation in late medieval India certainly seems to have been rescinded. But the reasons seem more complex than any linear understanding of conquest and its precise influence on art. E.g. Very few prominent temples after the 15th century bear erotic representations countrywide in areas with or without predominant Muslim influence [except some in Vaishali, Udaipur and Cudappa]. Even in Vijayanagara paintings for example, the representation of women changes after the 15th century. While Dr. Evans is latching onto something important, a causal association with conquest must invoke a skeptic response.

8. Related: For imagery in the Mughal period see Private pleasures of the Mughal Empire and this. Also see, brief review of paintings of women.

8. Indian Corporates should do FDI

We can trust Ajay Shah with wild big-picture thinking and he is back with an excellent short piece exhorting Indian firms to do FDI: FDI strategy for Indian firms. Let this line linger with you:

“In the field of international trade, the traditional classification has been that between tradeables (things like ball bearings) vs. non-tradeables (things like haircuts). But once FDI is in play, it is perfectly possible for an Indian firm to deliver haircuts to a customer in New York by doing FDI. Hence, the distinction between tradeables and non-tradeables is no longer that useful. The useful distinctions are between firms in India who have low vs. high engagement with the Indian state, and their going into high rule of law environments vs. other countries.”

Can Indian multinationals do effective FDI? Are there firms that are nimble enough? Difficult questions.

9. China dominates the world's Manufacturing Supply Chains massively

Offered without comments:

Source: Twitter

10. Ashish on his blog is simplifying Indian Power sector

My favourite Indian power sector chart:

Source: Electricity Distribution Report, NITI

One can in this chart alone explain comparative advantage, power micro-economics, state capacity, subsidies and public finance, contracting and negotiation. I hope Ashish writes about it.

11. Who got the PLIs

3/4th employment is from 4 out of 14 industries.

If the numbers are to be believed, they are impressive! 36% jobs of those promised claimed to have been created. Solid growth in mobile manufacturing, food processing and pharmaceutical. Most sectors have generated some employment. A more detailed CBA is necessary. Automobiles has had slow growth which is understandable because we have an unreasonably large inventory. PLI of 1.97 Lakh Cr attracted an investment of 1.23 L Cr, we must wait and see over five years if this investment expands, especially as the cycle picks up. Advanced Cell Chemistry batteries are yet to pick pace. Textiles are off mark.

12. Loneliness in American Youth

American youth are lonelier than ever. Somewhat true of urban youth in most metropolitan cities.

From Alice Evans:

Half of those single are not looking for a relationship or to date. An old related post, South Korea is disappearing.

13.Data Updates

a. GDP estimates recorded a marked slowdown and the Monetary Stance Remained Unchanged (Governor’s address, MPC Resolution, Minutes-to follow).

Private consumption is picking momentum. Hopefully, it sustains. Construction growth remains robust. Manufacturing and Mining unfortunately still remain sluggish. Sale of commercial vehicles struggling. Rates remain unchanged.

b. Latest data on Indian states from RBI is out

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In Re: Updated Terms of Service and Privacy Policy for WhatsApp users

The Competition Commission order on WhatsApp and Meta is out. I briefly summarised it here. It is well-reasoned except on some issues and lays down elaborate legal justification and data for its findings. Following are some important findings:

1. Jurisdiction co-extensive:

Reliance was placed on Excel Crop Care Limited v. Competition Commission of India and Anr. (2017) 8 SCC 47 and on the Delhi HC order in this matter against which a SLP was dismissed by the SC, restated the accepted position that the jurisdiction of CCI was independent and could be concurrent with other authorities deciding other issues of law. It was emphasized that anti-competitive practices in digital markets encompass user-data that is wider than ‘personal data’ and includes anonymised data.

2. Market I — Market for OTT messaging services through Smartphones

   1. Relevant Market u/s 2(s) and 2(t):

The CCI upheld the DG findings that the relevant market in case of WhatsApp privacy policy update be the market for OTT messaging through Smartphones. Facebook was dropped as not a related party, while Meta and WhatsApp were retained. WhatsApp contended that the relevant market should be the “market to gain and retain user attention.” The narrowest possible definition according to WhatsApp was “consumer messaging services”. WhatsApp was not found to be dominant in either of these markets by the DG. Their submission further was that the relevant market definition should not be distinguished based either on the kind of service (Don’t exclude Netflix, Koo, X, Emails, Slack, Zoom, etc.), modality( Don’t exclude SMS, MMS, RCS; or proprietary services such as FaceTime) or device(Don’t exclude Laptops, Tablets) through which it operates. The OPs also contended that they were competing with the global market. The share of WhatsApp and Messenger in an older judgment was decided to be 45-50%. (See para 18 here)

The CCI, in my opinion correctly held that conceding those definitions of a product market and geographical market was too wide to stand the test of 19(6) or 19(7). The CCI has held similarly for WhatsApp before. The CCI held that multi-purpose integration of WhatsApp and ease in accessing it distinguishes it from other mono-purpose services. They clearly demarcated and distinguished the use-purpose, type of service, device compatibility provided by the related apps. In what is likely to be critical going forward, the geographical limits were construed to be that of India and not global as contended by WhatsApp because the regulatory conditions are homogenous within India.

b. Dominant Position (S. 19(4))

Meta in addition to WhatsApp also controls facebook, facebook messenger and instagram messenger. The following criteria were considered by the CCI for investigating dominant position:

Direct network effects, the strong lock-in effects, absence of countervailing buying power, and control over huge data acting as barriers to market entry.

Reliance was placed on Daily Average Users, Monthly Average users(Number of users engaging with the service at least once in a month), Statista Consumer Survey to demonstrate that Meta in general and WhatsApp in particular have a very high share of the OTT messaging market. The growth in user base has also been substantial. The 2021 update did not affect the usual growth of MAU or DAUs and people continued to sign up involuntarily. What proportion of people signed up was voluntarily can’t be known.

Scale of users, lock-in and the network effect prevents users and advertisers from switching, thus leading to great dependence and minimising countervailing buying power of consumers (S. 19(4)(i)). The OPs contested that Indians were multi-homing and WhatsApp users had no dependence as in 19(4)(f). Commission contradicted the claim of extensive multi-homing using the MAU data of other apps which was much lesser compared to WhatsApp. It is trite to state this, but there also was no rival in assets and RnD spending to Meta.

The CCI also held that indirect and direct positive network effects, multi-sided market ecosystem akin to a vertical integration has led to an ongoing and reinforced dominance in the OTT Messaging through Smartphones Market. The CCI held network effect and status quo bias to be the most critical barrier for entry in this market. The CCI further underscored the dynamism required in market assesment in distinguishing its earlier judgment in a combination matter where it observed that consumer messaging markets do not have entry barriers. The CCI observed that while data sharing may be allowed for smaller companies, the bigger companies have an additional responsibility to beware of the anti-competitive effects of such practices.

The OPs contended that the zero-priced markets where competitors can grow fast must be studied in a appropriate economic paradigm different from traditional markets. Looking at data-use is crucial for zero-priced digital markets, and the CCI did appreciate the volume and use of data by the OP very well.

c. Abuse of Dominant Position (s. 4(2)(i) — Direct or indirect imposition of an unfair or discriminatory condition in Purchase of a Service)

i. “Imposition”: Meta’s take-it-or-leave-it privacy policy update which forced users to either accept their policy or delete the account [Condition] was a unilateral dictation of terms. The 2016 policy had optional data sharing but this was made mandatory in the 2021 update and was coercion to accept terms by Meta through WhatsApp.

ii. “Unfairness”: Lack of Bargaining Power, Unfair dictation of terms made possible by dominance as illustrated above. In an important observation, the CCI held that Privacy reduction is a reduction of consumer welfare in non-price parameter markets. Between 05.01.2021 and 07.05.2021 a sense of urgent fear was induced.

Market II — Online display advertising Market

Relevant Market:

Online and Offline Advertisement Markets are different and non-substitutable but complementary markets because of audience, cost, purpose, RoI, tracking and monitoring, reach. Reliance was placed for this on European Commission Orders in Google Search (AdSense) case (Case No. AT. 40411). Further, it held that Search Advertising and Display Advertising are different markets because search advertising is “intent driven” while display advertising is “audience driven” and based on the distinction between their zone of operation on the marketing funnel (could be an excellent conceptual device elsewhere too). Even here the market were deemed restricted to India.

Dominant Position — Puzzling that no dominance found u/s 19(4), reasons unknown, less understood

Meta was not found to be a dominant firm in this market. Meta argued that impressions are an inappropriate metric to assess market share or market position and other players’ has increased, the commission disagreed and showed that both revenue from digital advertising and impressions were disproportionately lorded over by Meta. Meta further argued that the online and the offline markets were substitutes as far as it was concerned, which was summarily rejected by the CCI. But, Google and Amazon both closest competitors were not close to either the impressions, revenue or revenue-growth generated by Meta. CCI also contended that the “potential benefit to users”(20(4)(n)// 19(3)(d)) argument had a very high threshold under the act, the burden was on the OPs and it had not been met by OPs. Having held this, it is unclear to me why the DG did not give a finding that Meta dominated this market.

Google and Meta have comprehensive data and are dominant entitites, and in the display advertisement market. Meta’s acquisition of data would be further detrimental to competition as no other data including any other third party data has even remotely similar strategic value. Sharing of data from WhatsApp to Meta can enable an even higher entry barrier for new firms. In presence of such personalised and localised data, switching costs remain high for advertisers too. The CCI reiterated that data integration by dominant firms is on a separate footing as against non-dominant firms. Google had been found dominant in the search advertising Market before. It appears that Meta was not found dominant in this market because other competitors like Google, Amazon exist.

Order — Abuse of Dominant Position — Denial of access in “any manner”, Use of dominant position in one market to protect position in another market, imposition of unfair condition on purchase

The commission found Meta through WhatsApp contravened 4(2)(a)(i) by forcing users to accept a compulsory transfer of their data to Meta. Further it held that, sharing of data by WhatsApp contravened 4(2)(c) by creating an entry barrier in digital advertising market, And, that as per 4(2)(e) Meta abused its dominant position in Market I to secure its position in Market II. The privacy policy was forced in Market I to tunnel the data to Market II, which would create unfair advantage for Meta in Market II. A cease and desist order for five years was issued. The CCI clarified that for imposing fines the relevant limit turnover for computation of such penalty, was the global turnover for the market relevant to the assailed action; but the CCI applied penalty only based on the Indian Turnover of WhatsApp and the Indian turnover of Meta in digital display advertising. Data sharing for non-advertisement purposes is allowed only where such purpose is explicitly communicated to the user. The public order expunged data and other details.

Recommended reading:

1. The need for scientific thinking about anti trust in network-effects

2. ECC decision on dominance of Google in Search and Shopping

Other Important Updates from Law:

1. Adani Bribery Order

2. Suggested amendments to Arbitration and Conciliation Act, 1996—Section by Section — We shall consider these in detail in another post.

Economics updates — Important Charts

1. RBI report on municipal finances; Municipal corporations still struggle with own-source financing. There has been limited progress on property tax collection by the Corporations over the last three years.

2. Cartography of Supply Disruptions

   It is rare when someone conceptualises experience elegantly. Review this chart to understand how to do or judge monetary policy in response to a supply shock. Reviewing the COVID response by the RBI in the light of this framework can be instructive. Francois Villeroy further leaves us with the eternal challenge of Economic Policy in the words of Bertrand Russel:

   “To teach how to live without certainty, and yet without being paralysed by hesitation, is perhaps the chief thing that philosophy, in our age, can still do for those who study it.”

   

   I wrote about uncertainty and its role in economic policy here [Time Thoughts and the Ghost of Shackle]. Empirics of increasing uncertainty here.

3. Graph of the week—Stare at it hard and long; especially how spending time with children changes between 30 and 50. Rarely ever is there a chart forcing us to reconsider life priorities.

   

   Source: Bryan Caplan on Twitter

4. Milk Production and Consumption in East India remain low. Why is this? It is growing fast, new schemes are coming up. Subject matter for a future post.

   

   Source: The Print, India in Pixels

   ---

Akshay Mangla, a professor researching development, recently wrote a blog post on the politics of schools and learning. He emphasizes that “Implementation generates its own politics” and that is the bottleneck of Indian schooling. The article merits close reading many times. It is an excellent primer on rules, discretion, culture, politics, and human flourishing if read closely. The book on which the article is based is itself valuable; a book I wish I had written (much like 1, 2). We seek to engage with this article in the later part of the blog. But, before we turn to the book or the article itself, it begs the question; why does the book matter? What is the politics in education? Why should you and I care?

Our last train to Prosperity…

A short answer is that this is our last train to prosperity; material, spiritual, or otherwise. The learning crisis has never been more colossal and urgent. Ten more years and it will be too late. It’s now or never. We are in a sinking ship. Why do I say that?

Some of us know things are bad in school education, but let us first spend time to understand just how bad! Let us focus on rural data, because that is where the data is better. For some context, 82% of our schools, 90% of government schools, and 70% of our students are in rural areas. So that is still, most of India and on most counts, urban schooling is not too different.

Learning for a toss: Adolescents in Rural India

34,745 rural adolescents across India between ages 14-18 were surveyed in 2023 after the pandemic by ASER. Let us start with that. One in four children aged 14-18 could not read a level II Hindi/ Vernacular text and most tested adolescents couldn’t do basic arithmetic problems. Pause for a while on the responses to some questions posed to these adolescents and think carefully:

Source: ASER 2023, Graphics

More than half the adolescents couldn’t divide three digits by one digit. 6 in 10 couldn’t use a ruler that did not start at 0. At 14-18 years of age, you would expect an adolescent to have advanced language skills, a somewhat strong working memory, the ability to think abstractly, make judgments, and so on. Complex comprehension and creation of knowledge also develop in this age. However, most surveyed adolescents were struggling with very basic cognitive tasks.

On slightly advanced tasks: a staggering 9 out of 10 adolescents couldn’t calculate repayment amounts and choose the better option given simple interest rates of banks. More than half the adolescents couldn’t tell how many hours a person slept, given the time at which they slept and woke up! 4 in 10 people who knew arithmetic still couldn’t answer this. Though very many knew how to use smartphones, only about 40% of adolescents knew how to use a computer. These tasks require some attention, basic numeracy, logical reasoning, and reasonable executive function, but nevertheless are easy tasks we would presume someone with more than a few years of schooling would be able to perform effectively and easily. Still, too many of our adolescent youth couldn’t. 35% of adolescents surveyed couldn’t follow three out of four instructions on a basic ORS packet explaining how to make an ORS drink.

Where is the problem though? Did they forget basic activities? That is unlikely, because, guess what, most of them were still in school! One-third of those enrolled in school, were also working for more than half of the last month! Likely, they never picked these skills. Most did not learn division, basic reading, and life tasks like discounting, simple interest calculations, and counting hours in school. Only 5.5% of those tested were attending any vocational courses. In the 2017 survey, 35% of students who couldn’t read class II level text wanted to study beyond class XII! Further, more than half the adolescents couldn’t tell where their state was on the Indian map.

Source: ASER 2017

What were the aspirations of these young adolescents? The 2023 survey captures this. Most wanted to join uniformed services or write the myriad government exams. [Which in itself has many difficult consequences]. About 36% of adolescent men wanted to join the Armed forces or some other government service. 27% want to be in the Army or Police, often for lack of different role models. Most adolescent females wanted to be teachers, nurses, or doctors or were undecided.

Stare at the chart that follows for a long-ish time. A lot of our social problems are reflected in it. See how many you can identify. This has been explored in some detail in the ASER report which I recommend you read. But let me remind you, that more than half of these can’t divide or read more than a few sentences in English with comprehension.

Source: ASER, 2023

Does this worry you? After 10 years of school? Hold your breath. Let us go a few grades lower. Adolescents aren’t but are our children learning?

Children in India: No learning at all

Almost all our children up to 14 years of age are in schools. 80% of three-year-olds were attending some Anganwadi, pre-school, or school. 88% of four-year-olds were. But wait a second, how many children is that? We have about 26 crore children in schools and roughly 15.6 crore children are studying in schools that are government schools or government-aided (urban and rural).

As per ASER 2021, too, 70% of the children attending schools in rural India are in government schools. COVID also seems to have hastened the move to government schools somewhat. 4 in 10 children were in addition also attending some form of tuition. At age 15 roughly 8-10% of children stopped attending school albeit, with much inter-state variation. E.g. 17% of 15-16-year-old girls in MP were not attending school! The stakes in this are very high.

Now on to their learning;

As of 2022, a shocking 75.5% of class V students across India could not read four five-word English sentences. Pause, hold your breath, and read it again. 3 in 4 class V students couldn’t read class II sentences in English. There was substantial state variation with the number for Kerala touching 30% (Which is still 1 in 3 and a lot) and 92% (!!) of children in Gujarat. Less than 80 of 1000 class V students in rural Gujarat were able to read class II level sentences in English. This is an alarming crisis; of the highest proportion with grave consequences.

Well, maybe they are just bad at English, so what? Here we go:

More than half of class 5 students and one in three class 8 students still could not read class 2 text in vernacular languages. Only one-quarter of Class-V students and less than half of an average VIII-grade classroom would be able to perform division. 7 in 10 class III children could not do basic subtraction!! This is a crisis. Of the highest proportion.

Private schools fare somewhat better on some counts, but the reasons are less understood in research. Some even argue they generate equal learning as government schools. Parents certainly preferred private schools, but going by ASER findings that seems to be because private school-goers spoke better English. Private schools certainly gave more learning per-rupee but matters are more complex there since some argue that government schools have disproportionately more first-generation learners to cater to. Summarily, there is a lot of diversity within schools and the socio-economic classes of children they cater to. ASER also shows that the condition of the households and parents’ levels of learning for children they survey have improved over time, but that does not seem to have translated into better aggregate learning outcomes for children.

One may argue, well, for all it counts things must have surely improved over the last decade. After all, progress is slow in these matters. Education is complex business?! Let us turn to that. The grade-level improvement in the proportion of children with any specific learning skills has been more or less flat over the last decade. There is no area of Indian life that has not changed over the decade, except learning in school. We are where we were exactly ten years ago. In some ways worse.

Source: ASER Learning Trends.

But hey, we have given everything to schools! After all, the spending has increased so much. Not so many computers and books certainly, but a lot of basic infrastructure? Then what are we missing? Something seems wrong, doesn’t it?

Caveats and Context

Is it only an outcomes and process/implementation problem and we have solved for inputs? Before we come to that let us learn some more important contextual caveats:

First— Single-teacher schools and multi-grade classrooms: As many as 1,17,285 or 7.9% of total schools were single-teacher schools. We have too many districts where more than 10% and in some even 20% of the total schools are single-teacher schools. About five districts had over 1000 single-teacher schools, some like Barmer because of the terrain. Few schools also have issues with access-roads, particularly in Northern and North-eastern hilly areas. These need to be solved urgently. Single-teacher schools mean multi-grade classrooms and that is bad news for learning. Only 6 in 10 schools reported that their classroom spaces were in good shape, some effort towards fixing that must also be eyed where costs are permissive. This does zilch to improve learning but makes for a warm and inviting learning space.

Second— School size, composite schools and rationalisation: The average size of a rural government school is 150 students. The number falls to 115 for primary schools. Going by the PTR, in an average school there should be four classes of roughly 30 each and about three-four teachers. But that is for the average. Average is the most misleading of all statistics. Just like for learning levels, the distribution of PTRs can also be skewed, especially if discretionary deployment of teachers in required locations is a challenge or ensuring attendance in some areas for example is an issue. Composite schools which are merely 9% of total schools housing more than one school section (primary/secondary) in the same compound have 27% of the teachers and students with an average size of 518 students. Senior Secondary schools have an average size of 267 students. More composite schools and more teachers would certainly help because they create a better cohesive environment for the teachers. The NEP is trying to have us move in that direction, except the provisions about this in the original draft have been narrowed to give states more flexibility on this aspect. There are also problems relating to the deployment of female teachers and transfers to some blocks of specific backward districts or in single-teacher schools that make matters worse. States albeit have been trying to rationalize transfers, posting locally wherever possible so as to make PTRs homogenous across schools. See these national rationalization guidelines too for instance.

Third—School level PTR and RTE: The PTR in government schools for primary and higher secondary students overall is 27:1 and is much lesser for intervening standards. Albeit, at the school level, the PTR may often be worse. One in four schools teaching class VI-VIII have a PTR exceeding 1:35. 70% of schools in Bihar exceed the 1:35 ratio. The evidence on how effective reducing PTR is, is split. For all the problems in transfers “for PTR maintenance” that it creates, the RTE act mandate u/s 25 must be amended. It ought to be a guiding principle. RTE itself may be recast in the mould of the NEP. (See Sections 21-22 which have failed miserably and onerous curriculum requirements for teachers in Section 24.) Having more teachers can also help effectively tackle the multi-grade classroom problem. But PTR by itself is not a useful metric for determining quality of education but where it leads to multi-grade classrooms or single-teacher schools, it becomes critical.

Fourth— Let us do away with the myth that country-wide we have too many teacher vacancies. According to an official source, we have staggering vacancies of teacher posts [Statewise] in government schools. In UP alone, 39% of teacher positions are vacant. In Karnataka 57% of teacher posts are vacant. The total number of vacant teacher posts across India according to this source is 12,54,773! That is approximately one less teacher per about 110 enrolled students. The numbers seem overstated and calculated based on applying the threshold PTR as prescribed in the RTE to every school. Except in some states, teacher shortage is not a problem and aggregate PTRs are optimum.

Fifth— Most states have under 1:30 pupil-teacher ratios as recommended by the NEP and the RTE Act. Some states like Bihar, Jharkhand and UP have higher pupil-teacher ratios. E.g. Bihar government schools have a pupil-teacher ratio of 57:1. These states could certainly do better with teacher hiring and efforts are being made to that effect. Hiring and transferring teachers requires substantial political capital because teachers are embedded in state politics. Teacher Unions (also see, and this) are also powerful and influential.

Sixth— Contract teaching: We have as many females in teaching as males, perhaps even a little more than males. Teacher absenteeism without reason is between 2-4% and reasonable for public officials. While, often the other duty burdens on teachers may be high leading to less presence in school. Training, poll management, census, vaccination, COVID response, cattle census, ration card verification are sample tasks that teachers are routinely expected to do. 11% of hiring (about 5.5 lakh teachers) in government schools is contractual, almost entirely in rural schools. Except in states like Jharkhand, most teachers have some teaching qualifications. Jharkhand also hires more contract teachers. Only about 10% of teachers in India have no professional teaching qualification. Notably, 60% of these are working in private schools. But whether degree, gender, teaching qualifications are related to learning levels at all is inconclusive. The education community is split between two camps. One, which recognises the importance of securing teaching as a career and teacher professionalism. Second, which would argue that contract-teaching or hiring teaching assistants with lesser qualifications is cost-effective and can with some training, given their intrinsic motivation be effective at delivering basic learning skills. The third camp where I sit argues that both can co-exist. But, the UP para-teachers’ assimilation as assistant teachers to cater to their career concerns and to respond to political manoeuvring by para-teachers was struck down by the SC because the Shiksha Mitras as they are called had not qualified TET and were underqualified. The court order led to the cancellation of about 1.78 lakh appointments. This has meant that experimentation with teacher hiring will go on a lull in India for a while to come. But like I said, and to reiterate: We have near about enough teachers!

Seventh-Courts: Courts have also been difficult to circumvent in schooling, teacher hiring and related policy efforts. Stays on appointments for scams in teacher hiring Bengal, and tussle on hiring teachers in UP (Also see) which has been ongoing for five years now are instances where the court had to stay or even cancel appointments of thousands of teachers. Sometimes the courts have simply overstepped. For example, in an ironic judgment, they held B.Ed is not a valid qualification for primary school teachers in Chattisgarh, only a D.Ed. is [B.Ed. is a higher qualification]. In Odisha, it took three years for the High Court to overturn its decision disallowing rationalization of schools. New Transfer policy in UP too got overturned [https://l1nq.com/1uuuc] by the Allahbad High Court. Sometimes, courts have added to the confusion. Allahabad, Bombay, and Karnataka High Courts have given conflicting judgments on an important aspect of the parents’ right to choose private even when public schools exist under the RTE Act. This matter remains pending in the Supreme Court. Paper leaks (See Bihar, Rajasthan make matters worse for hiring. With some seriousness, none of these challenges are insurmountable where hiring is necessary at all. But I contend that most states don’t even need hiring they just need better, professional, and politically insulated HR management.

Eighth—Area-specific issues and teacher quality: While the things we said in one to four are true on average, we must be mindful of aspirational districts and state-specific (Parts of Jharkhand, Bihar for example) issues and areas where a lot still needs to be done. Teacher quality and teacher education(1) is sometimes compromised but I believe it is beyond the scope of this article to assess that carefully; so it suffices only to acknowledge that fact.

What does all of this mean?

What is the point of all of this, you may ask? It’s this: We have functional schools with much of the required amenities, we have sufficiently staffed schools except for the challenges highlighted above, and yet most of our school-goers and adolescents can’t read, can’t do basic arithmetic, can’t execute simple cognitive tasks. Without a surprise that 40%+ of our graduate workforce is unemployed. We did not school them, they are struggling! They are struggling with the math, the reading and they are struggling with self-esteem. We also can see that courts and politics of school policies can be difficult to navigate, especially with powerful teacher unions

Can we not spend more to solve these problems? According to some sources, 80% of our school spending is on teacher salaries and teacher training. Our total spending on education is a little over 4% of GDP and roughly 15% of the total government expenditure which is in keeping with global norms. We spend about 5.95-6.25 [2020-21 figures, so take with a pinch of salt] lakh crore rupees Union, State, and UT governments put together on the revenue budget of elementary and secondary education. Elementary education is half state and half union expenditure and secondary education is almost entirely state government spending. We are roughly, back-of-the-envelope, spending 38-40k rupees per child (revenue account only) on government school rolls every year. But we have achieved no learning at all. Some analysts have gone as far as to argue that the government should just give out the per pupil money as cash. Unfortunately and most importantly:

Only 25% of our elementary education revenue budget and 12% secondary education revenue budgets are being spent by local bodies!

India does not participate in any international school-student achievement rankings like the PISA. The reports had to be buried, the one time it did as India stood second from the bottom. We also understand things like when villages get access roads—enrolment increases are conditional on the opportunity cost of attending school, our children learn better arithmetic in bazaars and are fluent at those transactions but struggle in schools. Test scores have to be made up to cater to the endless kaagzi-kaam and aankdebaazi required of the teachers and administrative data collected through testing by schools is non-sense.

Why is learning so important?

Almost the entirety of social transformation and the edifice of development hangs on getting schooling and basic learning right. Without fixing this, we are chasing a chimera. Our social issues—caste for example, a new politically-active citizenry that reads, discusses, and debates and is not afraid of rules, our promise of economic development, the transmission of new-age values, training self-learners, nurturing sense of entrepreneurship, cultural ideas, aesthetics. [Note from the aspirations part of this blog how no child wants to or can afford to be an artist, what an ordeal for a civilization!] The continuance of the Indian dream, if there ever was one, hangs on teaching our children to read and subtract. It has never been more urgent than now.

Finally, the most important question that Ajay Shah once asked must be asked of our schools: are we doing enough on all five of the Big Five Personality traits? Or are we endlessly focusing on conscientiousness? Can we ever move away from heaping praises on conformism, rote-learning, and from endlessly testing and sorting children?

While we move to exploring the more systematic issues with Akshay, we must acknowledge that within the government there is an increasing seriousness and initiative to tackle the deficit in functional literacy and numeracy. NIPUN Bharat, Ankur-MP, NIPUN-Axom, etc. have been initiated to plug this essential gap in literacy and numeracy. But the structural issues persist.

Let us now engage with what Akshay writes about those.

_{The devil is in the deviation from the rule}

Akshay in his article argues that failure in delivering primary education is primarily an implementation problem with solutions that may be political. He argues further that the capacity of Indian governments is limited, good at episodic bedazzling delivery but much less effective in ongoing service delivery, and has stretched local capacity following Devesh Kapur. It is further limited by legalistic bureaucracies.

What does legalism mean though?

“Legalism is the ethical attitude that holds moral conduct to be a matter of rule following, and moral relationships to consist of duties and rights determined by rules.” ..[and rules only]

Legalism, Shklar Judith

Akshay then argues that education is a complex and politically embedded social process, much like Anurag Behar, requiring substantial input from non-actors like parents. Education in other words is co-produced. Learning happens outside schools too, but non-actors’ engagement with schools must be facilitated for any meaningful learning. Who are these non-actors though? What do they want? Parents who want the best learning for their children, and the village-community that should want accountability of teachers are two prime examples. Anurag would suggest that a ‘social human process’ means we need to trust the teacher and let her figure out how to hold attention and teach her students while the rest of us keep a thick check on the functioning of the school and support the teacher and the child. Anurag also cautions us that what appears like an education-only problem might in fact be a deep-soil state-capacity and state-mechanisms problem.

Akshay gives us a vocabulary to understand this deep-soil through his careful study of the three different levels of government. I endorse his idea that one of the crucial elements of success in delivering education is that:

The local bureaucracy must operate deliberatively-emphasizing adaptivity and flexibility rather than legalistically- emphasizing rule-compliance, for both formal and informal bureaucratic rules.

The Ideal Shiksha Vibhaag Karmachari

For effective co-production of learning, in other words, it is important that the median local shiksha vibhaag karmachari be motivated, purposive, flexible, patient listener, reasonable, responsive and collaborative in addition to (perhaps instead of) things mandated by his Weberian service rules [Sample]. He further asks that the bureaucrat must sometimes also be activist-y where conflict or inequality are barriers to participation! Legalism is fatal to complexity. Legalism seeks to conserve existing norms and power structures. This reminds me of an incident, narrated by Karthik, where a local bureaucrat once asked Rukmini while she was exposing fake data and aankdebazi to the villagers: “Aapko sachchai se itna lagaav kyu hai?” Rule following is in itself a self-sufficient virtue in legalistic bureaucratic systems, even more so that being truthful.

Source: Akshay Mangla, Making Bureaucracy Work

His contention is that rule compliance can make the delivery of complex services hard, the bureaucrat must instead be problem-oriented. He must engage, deliberate, act, and course correct— focus on the process too. There is a permanent trade-off between administrative control and deliberative discretion. That is manifest in rule compliance and deliberation. Most officials operate on the golden mean, excluding the ones who are less efficient or corrupt. Being a government officer is a riveting balancing act between rules, sensibility, compassion, law and stakeholder opinion. Akshay suggests, that more flexibility in adaptation would be a great favor to the local bureaucrats who are checked and tied too stringently by their own legalistic culture.

Source: Akshay Mangla, Making Bureaucracy Work

Paper trail and compliance culture

How do rules change anything though? Aren’t rules a good thing? Firstly, Rules necessarily mean checks, and checks often mean paper trails. NCTE here lists the 75(!) types of records and registers schools may want to keep. Government teachers are required to keep a lot of these. I have filled many of my mother’s forms and sheets who was a government school teacher. Further, every rule requires compliance. Rules reduce principle-based discussions and restrict the scope for tailored innovation or course correction. Rules over-prescribe the right ways to connect input to outcomes—only if we had a size that fit all. More rules mean teachers are bound by diktats and are at the whims of entities external to the challenges of that school— yes, each school is a unit by itself—like Anurag argues. Stringent rules mean teaching and the teacher is reduced to targets and sheet-forms. The social recognition that the teacher seeks to claim for herself is limited to the reams of reports she must send back to the AO. Akshay further identifies two important limbs on which the failure to deliver services lies:

The inability of the local bureaucracy to deliberate and the insulation of local state from the top-heavy planner state.

This sounds much like a culture problem! Norms develop to favor conscientiousness at the cost of iterative deliberation. This is not new to us. Lant has been arguing a version of this for a long time now. Here is his framework for iteration for example from his book which is a bible [Thanks to Chris Blatmann for introducing this book] for students of bureaucracies:

Source: Pritchett, Woolcock and Andrews. Building State Capability

He is not alone. Ashish, in his excellent article, points out that we should create multiple local Coasean equilibria, and stop searching for one grand equilibrium bargain grounded in precisely specified rules. Karthik calls it decentralized experimentation. Biju calls it participatory development. They are all referring to less centralized control, more deliberation, more adaptation, and tailoring. The school can’t operate like a franchise following precise rules, it needs to be its own firm with the teachers in-charge. These many economists rarely have a consensus on something; anytime that happens we must grab the opportunity.

If you don’t take anything else from this blog post, do take along this metaphor by Pritchett where he summarizes it with a precise metaphor:

“In many countries, the legacy system of schooling is a large government-owned spider.”

“[We] ..adopt the metaphor of a spider because a spider uses its web to expand its reach, but all information created by the vibrations of the web must be processed, decisions made, and actions taken by one spider brain at the center of the web.

The starfish, in contrast, is a very different kind of organism. Many species of starfish actually have no brain. The starfish is a radically decentralized organism with only a loosely connected nervous system. The starfish moves not because the brain processes information and decides to move but because the local actions of its loosely connected parts add up to movement.”

Lant Pritchett, The Rebirth of Education: Schooling Ain't Learning

Accountability Crisis?

But how do we layer that much flexibility with accountability, transparency, and uniformity? How do we achieve these three benefits of a strictly Weberian Bureaucracy when discarding it?

Turgid rule compliance, Akshay argues, dissuades participation because people are unable to keep up with the maze of rules. In an idea that might sound counter-intuitive, he suggests that less legalism makes accountability thicker! It allows non-actors to participate and enhances ways in which actors can engage with these non-actors. Akshay also suggests as one of the ideas that political parties could operate at a level of administrative mechanisms influencing planning and use of public resources rather than just spending. But this also exposes the local bureaucracy to manipulation and control by local actors, especially in places where there is insufficient local competition for power, or where local governments are choked, like in Maharashtra. What is the consequence of this tradeoff? I must admit I do not know. This is a top-right corner challenge on an importance-difficulty matrix of the Indian state’s challenges.

Akshay also highlights that community mobilization for accountability may not always be viable. See this excellent chart for example:

States like Kerala that have excellent Panchayati institutions have less to worry. However, most states do not have local participation as an embedded social value. How do we nurture it against all the myriad local interests eager to capture the state? Can it be nurtured at all? Over the short run, unlikely. How else do we demand accountability? Again, I do not know.

Akshay then leaves us with some gaps. How do we sustain this engagement of non-actors? How do conflicted societies resolve the challenge of doing new things? How do we go from small-scale knowledge to large-scale effectiveness while keeping a mere rule-compliance minimum [The RCT version of this is here ]? Biju Rao has hinted at some answers: when ‘cultural configurations, spirit of improvisation or values replace rules.

Acemoglu shares this important idea as a theoretical consideration that over-incentivization in bureaucracies can lead to wasteful signaling. We have both problems of under-visibility and under-incentivization for teachers and low-ranking bureaucrats and over-visibility and over-incentivization of higher bureaucracy and politicians in India. This leads to a state that is split from the center into two halves with different priorities. We also have a socio-economic structure that is split into clear silos and these two splits of bureaucracy and the society often amplify each other through Hirschmannian dynamics of Exit, Voice and Loyalty. This problem of the state which is manifest in every development challenge has become the glass ceiling of public education in India. It in my opinion is the most important phenomenon leading to inputized education.

Probable starting points for solving the problems

There are in my opinion three important things needed to urgently tackle this, most of which have also been prescribed by Karthik in his new book. NEP also considers some of these closely.

First, shift the goalpost and fix it there; As Karthik also suggests, make third-party aggregate and objectively measured learning outcomes data at some ward/block level the most valid criteria for signaling, leave everything else to the ward/block officer— I must caution that it is a difficult thing that is being asked—we are asking to shift values.

Second, which in my opinion is more practical, deregulate schooling, and decentralize funding to Zilla Parishads and local bodies and be light and skeletal in prescription. Flatten the local bureaucracy, assert the importance of the teacher, and assert minimum accountability but implement it strictly. E.g. The teacher showing up in school must be non-negotiable, all his students passing the grade-level math exam need not be.

In admin lingo: Zamini Sthiti must not be distorted, but it need not be rigidly niyam-baddh. Prashaasan Karyapaddhati needs to be flexible allowing adaptation and must be shikshak-kendrit. Prashaasan must be less anxious about being dheela, and use the danda sparingly.

Third, cut the paper trail, free teacher time for teaching, change the nature and scope of accountability and substitute it with support wherever possible, and bestow cultural value and dignity back on the profession. Take Anurag seriously when he says “Teachers are our only hope”.

In admin lingo: Dhaandli and ghapla in musters need to be prevented. AO must do visits for niyamit nirikshan, but she should not do too much dakhalandazi in the teacher’s role. She must support the teacher wherever possible. Kaagzi kaam must be rendered unimportant and not a part of teachers’ duties. A teacher’s pehchaan in the vibhaag must be by her students’ abilities and the environment in the school and her classroom and not by kaagzi kaam. Teaching must not be anya kaam and everything else should be made to wait where it can wait. The teacher should have no other duty, she should only ensure children learn.

The second suggestion, I believe would mean insulating school education from both the existing executive and the judiciary into an independent branch with clearer and limited mandates. The first and the third need a lot of socio-political engagement. In all three we lack capacity and expertise across all levels of government. Just the idea rings so foreign to us! But we need to build capacity. Capacity can only follow with responsibility. We need to do all three, do it now and do it fast. Is this premature load-bearing? That needs more research. But, tentatively for the amount of futility this will reduce it will free up a lot of time and money. It’s a reorientation of purpose, not excess load-bearing.

Karthik has laid out a blueprint for us to debate remaking the Indian developmental state. We will have to skip the details, be skeletal, and adopt the starfish approach. Because rules govern the process of their own becoming. Operation and practice of the rules is in reference to the ideal it embodies and seek to uphold. We must emphasize the ideal and impress it. Prescribe too much content and we are in trouble again. Is this impossible? Maybe not, but it is certainly very very difficult. Delhi did all of it, somewhat successfully too; and we have no other choice. The stakes are too high!

Schooling is a unique challenge

School Education is unique. Everyone agrees it is important. There is a broad agreement on what kind of solutions are workable. We are spending money on both inputs and teachers. But, we haven’t really gotten anywhere. We have a somewhat successful diagnosis of what might be happening: sorting, teaching to the test, teacher incompetence, unreasonable expectations from the system, poor quality teacher training, multi-grade classrooms, mother tongue-local language dissonance, poor early child education, a large burden to undo the loss on the lottery of birth, burden to invert rigid social structures, failure to make children loved and welcome in school, inability in catering to teacher dignity and career aspirations. The verdict is more split on effectiveness of contract teachers and relevance of teacher qualification, more or less top-down structure prescribed in curriculum and teaching-style as per experience and skills of the teacher, more infrastructure or less, no detention policy, etc. But all of this put together, what is certain is that the status quo has led to the worst outcome possible, and probably the most dangerous: ten years of schoolin and allied efforts and most of our children and adolescents can’t read, subtract or divide!

Weberian bureaucracy is a very poor choice for running many lakh schools. It is a also a bad choice for running a few hundred schools. It may be a good choice for running about 10 schools but only if the head of the chain is a thinking bureaucrat, if he is the spider. Teaching can be structured, but it cannot and may not be mechanized. Whatever changes we make will always be better on average than what we have right now. What we have right now is a massive crisis. Mere paens to accountability and a quest for a hyper-responsive system is a lame excuse for the existence of rules that go straight to the heart of the purpose of the institution. How do we make a gradual transition from a spider to starfish is something we should all think about. Education is freedom, an institution that can’t breathe freedom; will never transmit freedom.

If you read or skimmed the article till here, I am grateful. This article is a work in progress and I will keep updating it. If you are interested in learning more about the issue, please consider reviewing the links attached throughout the article and at the end of the article. Your feedback and disagreement is very valuable to me. Thanks to Akshay Mangla for his blog which motivated me to reflect.

Additional Reading:

1. Highly Recommended—Anurag Behar, A Matter of the Heart

2. Akhil Gupta, Red Tape

3. The New Education Policy, Draft NEP

4. Recommended— Subir Shukla on unpacking the complexity of Teacher Professional Development and how it needs to be transformative. How do we do it differently ? What are some of the challenges? [https://youtu.be/Okw1opKfKYU]

5. Subir Shukla on how education systems learn. [https://youtu.be/NqJorDjPnGQ?feature=shared]

6. Manish Sisodia, Shiksha

7. Lant Pritchett, The Rebirth of Education, Schooling ain’t learning

8. The GEEAP report on interventions for cost-effective learning

9. TISS report on teachers in India using UDISE 2021-22.

10. ASER reports 1, 2, 3

11. School Rationalization Guidelines

12. Teacher absenteeism in India, Azim Premji Foundation

13. Road Scholarz and their excellent research

14. Ashish Dhawan on FLN, Convergence foundation

15. Ajay Shah on Education in Everything is Everything

16. Karthik Muralidharan on Education and the Indian State on the Seen and the Unseen. 1, 2, 3. Karthik’s paper on reforming Indian education

17. Pritchett’s latest framework for analyzing school education and learning

18. A brief primer on powerful teacher unions in India.

19. For the Marathi listeners - The Genius of Vyankatesh Madgulkar narrates an AO’s inspection, PL’s Chitale Master, Bigari te Matric

20. Some collected cultural references to schooling.

CCI, Meta and the Indian wrestle with Big Tech

CCI in its suo-motu proceedings fines Meta and WhatsApp for forcing Indian users to adopt its new privacy policy in 2021 on a take it or leave it basis.

Unfair Trade Practices, Abuse of Dominant position alleged in two relevant markets.

Market 1- OTT messaging over smartphone in India - Found to be dominated by WhatsApp

Market 2- Online display of advertising in India - Found to be dominated by Meta

1. Unfair conditions in Market 1

   WhatsApp was held to be forcing upon the users their updated privacy policy without meaningful opt-out of expanded collection and forced sharing of user-data with Meta. No choice was given to users, no control over sharing of data was extended and purpose of data collection was vaguely defined. The CCI held requiring users to mandatorily share data with Meta amounts to imposing an unfair condition for accessing the service u/s 2(4)(i)(a) of the Competition Act.

2. Restricting access to Market 2

   The CCI held that sharing of data from WhatsApp to Meta for purposes other than those required for WhatsApp Messaging imposes an entry restriction on other online platforms displaying advertisements leading to higher entry barriers for other players in online display of advertisements market. Held to be Abuse of Dominant Position as per section 4(2)(c) in Market 2.

3. Leveraging dominant position in Market 1 to protect position in Market 2. Held abuse of dominant position as per 4(2)(e).

While the order is not out yet the emphasis of the press note seems to be on this part of the privacy policy:

As part of the Meta Companies, WhatsApp receives information from, and shares information (see here) with, the other Meta Companies. We may use the information we receive from them, and they may use the information we share with them, to help operate, provide, improve, understand, customize, support, and market our Services and their offerings, including the Meta Company Products.

…..
"improving their services and your experiences using them, such as making suggestions for you (for example, of friends or group connections, or of interesting content), personalizing features and content, helping you complete purchases and transactions, and showing relevant offers and ads across the Meta Company Products;”

You may also review Meta’s privacy policy here [Why and how we process your information].

Related links

1. Earlier order. CCI Press Release here pertaining to the latest order, Report of the Digital Competition Committee [Summary] , the updated Privacy Policy.

2. Challenge to previous changes in its 2016 privacy policy remains pending before the SCI in Karmanya Singh after being dismissed by the Delhi High Court.

3. Final order from the CCI awaited.

“The problem with theory is usually reality”

Ben on Stratechery fleshes an excellent and brief economic history of the making of Silicon Valley with a challenge for all of us, can it change? Can we re-create it here and now?

Ben suggests the story of the boom post-invention of semiconductors begins with new Tariff legislation and Tariff schedules in the US. Extracted thus:

With this, importing labor-intensive output from across the border into the US became virtually duty-free. Commoditized, low-marginal cost, labor intensive services could be imported easily. Value-heavy tail-end production on the value chain like designing chips and marketing them and was centered in the US, the less value-intensive tasks of assembly were outsourced.

Low cost of labor for labor-intensive manufacturing in much of South East Asia meant they could unlock income opportunities through value addition. US debt remaining attractive throughout this period, facilitated first by Bretton Woods arrangements and then by USD being a reserve currency. This meant a lot of investment and labor payments could flow into these Asian countries from the US while still keeping the USD from depreciating.

Early in this century, software rose with near zero marginal cost. Talent from across the world pooled into the States, software picked pace. The US in other words optimized and affixed its position on the tail-ends of smile curve of value-addition in semi-conductors. It then again did so for AI. The high-value, creative and less labor-intensive bit was done by American firms and they outsourced the labor to where it was cheap.

This rock-solid stability that made possible the greatest symphonies in value creation in the world; Ben argues, may begin to be irritated if Trump actually does what he promised: ratchet up tariffs. Redrawing the trade and tariffs paradigm, like blanket flat tariffs on all goods and labor, might shake up value-seeking firms’ supply chains and lead to a major upheaval. Besides being inflationary, the tariffs and immigration restrictions may disturb the inertia and direction of the six-decade-long tariff and talent regime that made the Silicon Valley possible. Importing labor, and assembled products may become cost-incompetitive for American high-value producers opening opportunities for other country producers or for a new turn of American producers to develop complete manufacturing chains.

Related readings:

1. Hinrich foundation lists the anxieties of Trump- the tariff man coming back.

2. In the Diplomat, Can China still make it in high-tech manufacturing despite the tariffs? Also, answered in the affirmative in Bloomberg.

3. Where Rajan and Lamba’s argument that India should optimize to be on the high-value, creative tail of the smile curve as against labor-intensive manufacturing was critiqued for shooting for the stars with no earth to stand on.

4. Gulzar clarifies the ideation of PLIs drawing also on Studwell- Catch the big fish, incentivise productivity and its growth, kill the firms that don’t perform, incentivise moving across value-creation levels to complete the manufacturing chain. More on Industrial Policy for Services.

Contents

I. Rationality and context

II. Time, thoughts and the ghost of Shackle

III. Probability and Living by the bell curve

IV. Crossing the river by feeling the stones

V. Critical realist Economics

I – Rationality and context

Economics: A primer

Ashish Kulkarni, our professor, following Alex and Tyler, professes that economics is the art of making the most of life. I quite like that definition. But what does that mean for an academic or a social thinker? We can anticipate the rational (technically defined here) behavior of an individual acting optimally in terms of choosing what is more valuable over what is less valuable, recognizing opportunity costs, time horizons, incentives, and predictable consequences in choosing. But matters indeed get more complex in the aggregate. 

What’s rational for a person might not be for others depending on our subjective or incomplete assessment of their circumstances. The question of methodology is then born out of angst. How do we theorize the general? To paraphrase Friedman, ‘A photograph of the world is hardly a theory about it’. Selective specialization of ideas into concepts and relations becomes necessary, assuming away is critical for a theory to emerge. The purpose of theorisation could be any, the method is critical. 

We will take two extreme methods in Economics to understand what this might look like in practice. Model-testing and RCTs. I choose these two because their usage is common and they have a legacy of usage now. On the spectrum between these two you could include a variety of other methods. The spectrum I refer to here is of causality and generalizability. The more precisely you identify a causal relation the less readily it would be generalized and the more general your insight is, the less sure you tend to be about its causal implications. You could contextually tweak a model to incorporate local constraints or do many experiments over and over with small changes or do quasi-causal research or do very large experiments. All are directions research is moving into. But, understanding the extremes is useful.   

Friedman or Kremer?

We can choose to ignore some of the circumstances or subjectivity in examining choices of individuals (typically and often stated as assumptions) when building a theory. Milton Friedman’s advice was along these lines. Focus on rational, logically consistent theorizing without questioning the validity of assumptions; to the extent that is instrumental only in improving explanatory power of the theory. If a theory explained the world, the validity of its assumptions mattered much less.  

Or, we could go the way Michael Kremer went, rejecting Friedmanian modernism (See here on pg. 476 for his own explanation) in favor of context-based randomized experimentation. (Also enjoy a snippet he cites on the futility of 1:1 maps of the world) In his world, you had to engage with actors directly and chip away at understanding the world one piece of causal relation, one plausible mechanism emanating from one random variation at a time. We really examine one assumption at a time, but what happens when many of the assumptions vary at once? That is difficult to answer. RCTs too struggle with giving a model, a complete story and has problems emanating from exactly the opposite problem of too much context-reliance. That is the Puzzle of Generalizability or external validity, which we shall return to in a bit. Assumptions and context are mirror-images of each other.  For now lets ask what from the context can we assume away?

Assuming away

What can we assume away? How do we build actionable theories?  Economics keeps going in circles around this. Hayek’s question for example was about whether we could meaningfully distinguish pure logic of action from empirical content of the action in markets?  Mises would ask whether a priori logic that can be deduced to rules a.k.a. Praxeology suffices in explaining economies without attention to the content of actions as Mises would argue? Or in wider Weberian terms, the core question was about how practical rationality (undertaking means-ends actions optimally) and theoretical rationality (infer philosophical “meaning” from such actions) were related to each other and to actions themselves?

The assumption of rationality

Understood from an epistemic point of view, economists across intellectual traditions have tried incessantly to assess varying circumstances, rationality and its coherence in institutional and relational macro-design. Each new economic concept then tried to alter or answer an epistemological question adding more nuance to it. Unsettling the prevailing method and giving more epistemic certainty has marked a new shift in coherent understanding of the economy. 

Economists often have had better consensus on some fundamental tenets (1, 2, 3, 4, 5, 6, 7, 8) to ensure efficient arrangement of resources. But, how do we diagnose these other aspects that would interrupt our thought flowing from personal rationality to a meaningful theory of the economic world? Being a one-handed economist who studies rational means-ends reasoning to choose sustained efficiency is just hard even when actors are rational. Describing is somewhat easier, analyzing a little worse, examining demonstrable hypotheses a lot more difficult and forecasting is malady plaguing economics. The world is a damned place, complex, if you prefer that. 

I have sampled some examples for a survey: 

Presuming all individuals act in self-interest (not selfishly but not seeking better for themselves): what is rational for all individuals in their own capacity could be sub-optimal for a group (tragedy of commons, paradox of thrift , prisoners’ dilemma, bank runs, externalities) or for institutions (moral hazard, adverse selection, or information asymmetry more generally, flawed inherent incentive structure, unintended consequences, transaction costs) or for free exchange itself (cronyism, regulatory capture, rent seeking).

Moreover, we will never be able to tell accurately of that person’s circumstances (HANK, In poverty- 1, 2, 3), or a person’s location in society (Institutions, Culture, Social position, Geography), thus failing at anticipating what would be rational for him in that instance. This is if all individuals were rational but to make matters worse, sometimes people just aren’t always all that rational stricto sensu (Bounded Rational, Loss averse, Bad Intuition, Cognitive-Biased, Collectively more rational). 

Summarily, telling what people will do, how they will react and how that will change the world is hard. Economists have tried to plug the problems listed above by pulling newer pigeons from their hats. But that an interaction of just these twenty five instances sampled above and many others unlisted could often make the process of free mutual exchange erratic, or somewhat incomprehensible should be clear. Do I then declare objective knowledge to be impossible? Ah, boring. If not for anything else, I wouldn’t do that out of sheer metaphysical urge to make the world make sense. Also pause for a moment, and glance at those links again. That is a lot of progress, no?

New economics students like me get arrested by showstopper locked-in vocabulary non-stop. This is outside of the otherwise performative appeasement-linked narrative-mongering that is characteristic of some experts. This is often of a purely academic nature. “Too much nuance, too little (generalizable) content, no contextual appreciation, lack of system-understanding, not grassroots enough, vague model, unrealistic assumptions, uncontrolled unobservables, political economy of this and that, clarion call for interdisciplinarity, policy-relevant, institutional factors, state of technology and knowledge, human capital, power and politics, etc.”  are common academic veils of refrain. I have sometimes found these epithets to be lazy. They often mean an epistemic denial that the different disciplinary branches are stuck in. So let’s dig in and start exploring epistemology through examples. 

RCTs, Modeling and other things 

Economics, with its penchant for measurable duality, chooses to represent the world as a model and context. Logic and everything else.  That indeed makes theorisation tractable. Mathematics as the only internally consistent discipline which is a reflection of our mind and a pure theory of relations of relations, serves as an ideal tool. If we had to design an experiment to test the validity of the model, that would require making real conditions coherent with model assumptions. Friedman would politely decline it as impossible. Kremer, would go on to approximate this in Kenya by choosing not to model a priori, a.k.a. RCT. Assumptions in modeling made a priori often don’t hold and can be difficult to test. Likewise reducing all of context to assumptions for logically exclusive tractability is a difficult venture. One clarification here is in order that I am not yet referring to the problem of selection bias, just the context-assumptions-theory relation at the level of a coherent theory. 

RCTs

There is a crucial interdependence between what economics calls assumptions and what they call context. If you can’t vary a variable, hold it constant. If you vary it, observe it. In using modeling as the method, the world outside of mathematically disciplined logic is assumed to be a certain way. If we choose RCTs, the context itself is varied in a random-controlled manner. If we were to backtrack and derive a theory from the inferences of the RCT, we would assume away some context yet again. The only real benefit in this matter is that RCT allows the intervention to play out as it would and therefore might have a better chance at a more precise (but perhaps less general) theory. (Often, that too may not be the case ) 

Though they can’t be used to answer all questions in the discipline, RCTs offer some respite. RCTs can delineate an effect direction and size without even requiring a completely coherent or internally consistent model of logical choice and mechanism of operation. Some Potato-therapy in Mango River Basin led to a 2 SD increase in word-salad test-scores is a fair and complete summary of a RCT.  The author need not always take it upon itself to delineate how. She can only hypothesize the how and accept humbly that this might merely be one of the mechanisms. In other words, RCTs do not rely on a full model to reveal effectiveness. RCTs offer the flexibility to combine different mechanisms without having to completely model the scenario and all contingent relations of variables. I could very well bypass a constrained optimisation effort, use more uncertain terms than mathematics and attempt to engage with the muddy world as it is.

Most fruitful RCTs do try to theorize about mechanisms. Albeit, a model perfectly explaining one RCT in one place can sometimes only explain that part of the world at that point in time. Studying mechanisms that can potentially be general is a qualitative extension of the RCT. A theory would generally emerge from multiple RCTs revealing multiple mechanisms inductively woven together. Understanding effective mechanisms requires a lot more of breathing the context and repeated experimentation to even build baseline confidence in the idea. It often requires different observational methods than quantitative surveys.  Why something works and how to make something work are questions fundamentally different from whether something works. The former two can't always be reduced to inferential statements. Embedding yourself and breathing the context to reveal the mechanism, uncle Friedman obviously wouldn’t have liked. Other observational methods would steal the objective thunder forming the basis of such knowledge, robbing the purportedly non-causal knowledge of its appropriate epistemic dignity in research.

Models

Models on the other hand by requiring internal consistency in a priori logic, can potentially reveal flaws in reasoning by demonstrating varied possibilities, including some unimagined possibilities. Intermediate steps of a model can also tell stories, as can logical solutions to the model. But models are bound by constrained optimisation and logical tightness and a requirement of internal consistency. They require an expansive set of assumptions to make mathematisation possible. 

Cross-roads again. Where do we go? Knowledge, objective, possible? Let's go one step further down. 

Mary Morgan wrote an excellent history of modeling in economics. She argues and interestingly, making matters worse for us, that modeling is also in one sense akin to experimentation. She writes:

“..models, then have a stand-alone, autonomous, quality, that enables them to lead a potentially double life for, I argue, models function both as objects to enquire into and as objects to enquire with. That is, they are objects for investigation in their own right, and they help the economist-scientist investigate the real-world economy…

..model reasoning, as a generic activity in economics, typically involves a kind of experiment.” 

- Mary S. Morgan, The World in the model

Mumble jumble? In short, we think about models while we think with models. Using the model and thinking about it must be so tightly sequential that it is almost simultaneous. Then we can experiment while modeling using models.  Dani Rodrik is a proponent of this as we will see later. For now lets quickly also highlight the steps involved in modelling.

Three steps of Modelling

Assuming that a model seeks to discipline thinking in a coherent manner and also provide a framework for experiments, an economist has to face three issues, first two about building, latter about testing. 

1. How does the model abstract from the world, in how it chooses the most relevant parts of the world? This is an inevitable compromise to create an epistemic possibility. Too many object-actions might mean an overfitted explanation, too few might mean under-fitted explanations, parsimonious is hard. Too-tight might mean two things; too local or too situation specific, like a RCT. Too-loose might mean less causal accuracy, less tractability.  Like Economics sees them everywhere, tradeoffs are inevitable in studying economics too. 

2. How does it organize these facts thus chosen? Two critical aspects of these are what relational form to choose and if modeling agents, what form of action-orientation to presume. The former has been sought to be disciplined in mathematical theory to allow a priori notions, logical consistency, non-circular reasoning, optimisation etc. Action-orientation deliberates about how the agent is presumed to make choices. If rationally, over what time horizon, whether choosing utilities or not, etc. Is he a sociologically determined tabula rasa?  The variables and concepts used when doing this have to be pure in definition, homogenous in application, unchanging in time and insulable from other latent ideas to be useful. 

3. How does the model explain historical data about specific economic characteristics? For all models testing hypotheses, the model from 1 and 2 then is used to make predictions about some stylised facts and these predictions are tallied with different observable economic data. This “tallying” is a statistical exercise in itself and includes multiple problems as we will describe later. The findings then are used to improve the model, discredit the data, design new variables, re-interpret theories, choose between alternate theories, question the hitherto axiomatic assumptions, call for rethinking, furthering ideological ends, calling for new data, including more extensive data, recreating the model in many places and times and so on.  

Real world → Identified relevant objects→ Ideas → Concepts → Relations between concepts → Logical consistency → Theory → Theoretical predictions 

Thus, a theorist will have to identify elements, moving more and more of them towards the actual and empirical. In isolating facts to study the theorist has to

 1) Define new variables, 2) Start with a logical underpinning of how people will act and react [rational ordinal utility with assumption of consistency is standard] 3) She has to clearly describe functional forms of how the entities involved will act or give an exactness to inter-relations of facts [often through mathematics] 4) Then these functional forms will be solved to describe some patterns about solutions of these systems as predictions of how outcome is arrived at from the premise 5) Then using some intermediate equations and final equations, we examine if it is consistent with empirical suggestions 6) Experiment with the disciplining, add relevant facts, change the relations and redesign till the theory is consistent with data at that point in time. 

Concise, elegant, simple, parsimonious would make a good model. But there are two other questions that we need to ask. Which model do I use where there are many? When to discredit data and when to reject theory? How do we marry models with the context? Looks like art and I am no Picasso. Ah, fuck it.  Let’s hold this for a while. We will also see this manifest in RCTs in a later section. But before I bombard you with it, let's add one more bogey to economic theorisation itself. Until now, we have understood modeling by arranging time across a Cartesian space and thinking about context. Some in economics hated that. Time to them was more than that.  Let’s meet with them for a while. 

II- Time, thoughts and the ghost of Shackle

Time friction, uncertainty and imagination

GLS Shackle studying economics of Keynes under Hayek’s supervision (itself a rare distinction), boldly declared thus:

“Economics is about thoughts. It is therefore a branch or application of epistemics, the theory of thoughts.”

G.L.S. Shackle, Epistemics and Economics, 1972

The world varies in all the ways we saw in the previous section and this variation makes employment of a “pure logic of choice” difficult. But this difficulty is worsened by yet another culprit which is critical to epistemic inquiry. Time.Mises writing a few decades ago in his treatise on Human action, summarizes this best: 

“Constancy and Rationality are altogether different notions..”

L.V. Mises, Human Action, 1949

Sounds plain. But the statement is of exceptional import as we shall see. What it meant was that interactions and outcomes of rationally outlined behavior could change with time (also with space as we saw earlier). Shackle thinking along similar lines claimed something bolder. “.. science is merely the recognition and description of constancy.”  Therein was a paradox. Science operated on constancy, consolidation and recurrence. But economic rationality also had to make space for origination, imagination, expectation and speculation. 

As Shackle described:

“Time and Logic are alien to each other.” ….  “Novelty is the transformation of existing knowledge, its reinterpretation; in some degree necessarily its denial and refutation. Mathematics can explore the meaning of what is already implicitly stated, of what is already given.”

G.L.S. Shackle, Epistemics and Economics

According to Shackle, time in its reference to the future held in its womb myriad possibilities arising from the ingenuity of human thought and imagination. Every free man was a free thinker and could inspirit the world with novelty and inventiveness. The world as imagined in a timeless all-encompassing equilibrium described through a model, could not anticipate, incorporate or explain these possibilities. 

A natural question to ask is what is the realm in which this holds true? Or in other words, to what extent does this limit our inquiry of the world? One thing economists agree upon is that enterprise is an act of creative destruction and in the Schumpeterian tradition, innovation was a critical source of economic activity. Every invention created temporaryprofits. Through enterprise, through technology, by re-engineering the world in new hitherto unimagined ways, its effects were phenomenal but it was hard to predict. In a macro sense, Technology and innovation or enterprise thus for example could drastically change the world. So could social change, and migration and political propaganda. 

Subjective expectations

But, Shackle was saying something more fundamental. Each economic agent according to him imagined a future and birthed it into existence. We cannot use logic to foretell all the future possibilities. Writing half a century before him, Frank Knight understood this too. He saw friction as the source of profits. In his Risk, Uncertainty and Profits; he writes: 

“The normal economic situation is of this character: The adventurer has an opinion as to the outcome, within more or less narrow limits. He is inclined to make the venture, this opinion is either an expectation of a certain definite gain or a belief in the real probability of a larger one. …. it is correct to treat all instances of economic uncertainty as cases of choice between a smaller reward more confidently and a larger one less confidently anticipated.”

Frank Knight. Risk, Uncertainty and Profits.

A fully predictable equilibrated economy that any theory of probability could explain away fully, made profits impossible. This is obviously only true in competitive economies. In imperfect economies, efficiency gains from reorganization within the factors could still reap profits and growth. If we attempt to understand Shackle in the light of Knightian frameworks, the difference in their epistemic inferences is that of degree to which they thought uncertainty to play a role. Knight recognised the existence of objective uncertainty that could be calculated through a priori calculations or earlier probability estimations. The other subjective uncertainty could not be grouped into instances because such an instance was high-degree unique, therefore less understood and highly unpredictable. 

For Knight in practice when a man made a single-instance choice, it did not matter whether the risk was measurable or not because the application of exact circumstances of previous iterations to this case was difficult. Uncertainty, according to Knight could be managed by consolidating it, specializing who bears it, controlling future for example by codifying behavior into law, improving predicting power, diffusing uncertainty or redirecting activity to less uncertain spheres. If you have been able to follow all I said, you will understand that most economic regulators do one of these things. Overall, balancing dynamism and uncertainty are difficult. Why? Because predicting is goddamn difficult. 

Shackle was even more audacious in his claims. For him, the realm of objective probability was much narrower, almost non-existent. Current Value of things itself emanated from people’s subjective expectations and speculation about the future value of the concerned commodity. According to him, price simultaneously co-ordinated subjective valuations and rendered them temporary, objective, public facts. The originality of thought that would emanate could not be captured in rational frameworks because it was based on an imagination of the world. He says:

“…the region of ignorance is as important and as exploitable as that of knowledge. The exploitation of ignorance is called speculation” 

Prices emerged from disagreement of speculators about expected future value of the commodity as bulls and bears settled around it.  It was the unknown that created speculation and possibility of value. Tomorrow was a “figment”. Expectation was “origination”, and was “undetermined for all we know.” Valuation was expectation and expectation was imagination. Money had to look forward for value. Once everyone agreed which direction the price had to move, the movement would have de facto taken place.”

Denaturing of time

According to Shackle, economists denature time. They take away the most important facet associated with it; that of imagination and invention and represent time as coterminous points within a space. Such an arrangement then makes way for timeless equilibrium theorization and comparative equilibrium analysis. But such theorization necessarily fails when faced with novelty. Time was not to be understood as continuous versus discrete but as limiting imagination itself. Joan Robinson describes what economists do succinctly: 

“Time is a device to prevent everything from happening at once.”

We had to use time to allow sequence, to allow actions and reactions which we could contain into logical relations as varying with time. The question that begs us: Can denatured time, which ignores the role of rational indeterminacy allow us to predict the future? In other words, can we build a sufficiently complete theory of how things will turn out in the future using rational frameworks? Maybe not. We couldn’t explain most important shifts in the arc of history before they happened, for example. We expose ourselves to Black Swans, a fun discussion in itself. 

Summarily, old wine in a new bottle. Knowledge? Objective? Yes or No? Let’s try again.

III- Probability and Living by the bell curve

The automatic economist answer to the problem we just encountered is, let’s apply probabilities. This allows us to put a number to the uncertainty. To seek to understand its degree. In that case, the second question to ask is when can probability be used to describe the world? Put differently, is Knight right about the existence of objective probabilities? 

Can we study historical past or system characteristics to pin a number to the occurrence of events? One clarification here is necessary. Even though it might seem like that, we are not trying to forecast anything yet. This is just to understand whether a framework that we built out of our mind could explain the phenomenon we were trying to study in a narrowly defined social system. 

Dual understanding of Probability

Shackle, being the genius he was, provided us a framework. Shackle also gives us an elegant vocabulary to formulate the distinction in uncertainties made by Knight in terms of probabilities. He suggests that probability plays a dual rolein the world. It is both a measure of chance expressed in the nature of the world (objective) and a mode of reasoning the basis of whose assignment is ignorance (subjective). Pardon me for the long-ish quote that follows. But it is an excellent description of ideal conditions for classical probabilistic inference of a modeled stochastic system. Mumble Jumble? It is a theory of when we can assign a number between 0 and 1 to the degree of chance of something happening based on what happened in the past to a particular class of contexts. 

Objective Probability systems

Shackle writes: 

“Even in the kinds of treatment which we have labeled objective, probability is a mode of thought. It is, in these kinds, an interpretation of the way things seem to happen in a class of contexts. We have been seeking in the foregoing pages to define that class. We have put a gloss, perhaps an audacious one, on a distillation of some established ideas. If the resulting account of the application of probability to physical systems is accepted, probability, in order to be illuminating, requires certain conditions to be fulfilled:

1.      The system must be so circumscribed that its performances can necessarily be classified under some list of mutually exclusive and exhaustive headings.

2.      Individual instances of performance can vary in detail but not in general mode of occurrence.

3.      Such instances are independent of each other, in the sense that knowledge of one such instance throws no light on the character of the next. This stipulation guarantees the system against the occurrence of a train of instances each leading to a successor more extreme, in some characteristic, than itself. That is to say, the system has no capacity to engender a self-reinforcing and explosive process. 

4.    The system is guaranteed against invisible change of its constitution. To ensure this, we require it to be insulated from impacts from outside itself, and free from any capacity to evolve by some mechanism inherent in its design.

We select and collect these stipulations, from amongst many which suggest themselves, on account of their bearing on the application of probability to human affairs, in high contrast to the milieu of a physical system.”

G. L. S. Shackle, Epistemics and Economics

The implications for objective or classical probability are, 1) Being able to list all possible outcomes independent of each other whose sum total is one, in other words knowing the sample space fully well 2) Limited variation in the occurrence of instance itself 3) No self-explosive or self-reinforcing occurrence 4) System in which probability is being measured should have same general constitution and should not change with time or place from outside or within, even because of the instance to be studied itself. 

To cut through the bullshit, objective probability essentially did not apply to unique (see Black Swan events for example) instances. The event had to have occurred in a recognizable system systematically understood as a specialized class of occurrences which had been studied before. The event being studied now must not have been too different from events studied earlier in its mode, existence and operation. The system must not evolve or explode and the independent elements that acted on the event should continue to act on the event with limited known variation allowed. 

RCTs and objective probability

It would do us good to understand RCTs in this light. They allowed you to compare quantitatively similar systems on average through random assignment. If you observe closely enough, engaged with the context, you could come up with an exhaustive list of possibilities and the important ones amongst them for that context at least. The limited variation in occurrence of instances was created through controlled release of intervention style and dosage. A non-self-evolving system was ensured by limiting the setting to a partial equilibrium framework and focusing on limited areas of operation. System was guaranteed no outside change because of the controlled environment and the hope was that the self-evolution would be the same in both groups, treatment and control. Cute. Very smart indeed.

In some ways better than the model. Similarly, variations of model parameters at margins could approximate the limited variation. But self-reinforcement and its effects, to be predicted, needed advanced a priori theorisation and extensive counterfactual reasoning. Or you could go terribly wrong, also possible when applying RCTs to a different time-place. Systems would indeed vary and models had to vary with the system under consideration. You could potentially be an ad-hoc experimenter with models. Mary’s exhortation makes sense. 

Experiments gave probability an excellent chance, easily a better chance than models perhaps. But, were RCTs fool-proof in this respect of generalizing with the use of objective probabilities? Perhaps not. Where did things go wrong? All developing countries didn’t form a class.  Results wouldn't generalize to different places or even at-scale in the same place. Often two villages within the same block are not similar enough to form a class. (If your brain screams decentralize, think about the downside) Exhaustive list of possibilities across contexts is impossible to build. Multiple outcomes do not remain independent of each other, they co-evolve. Individual instances of performance or intervention and implementation details change with the context, they change with the implementer, they change with the people receiving the intervention. Interventions could self-reinforce and absolutely backfire over time. The way the intervention interacted with the context varied by the context. Surprises were abundant.  And the last and the most important, the system engaged with the intervention and evolved in ways that are not fully understood making transferring the learning hard. It could for example be capacity building, new expectations, cultural shifts and many others. 

Taleb in his description of Black Swan world explains why this happens. While we will come to it some other day, being an economist is hard. What is she to do then? 

IV- Crossing the river by feeling the stones

Shackle conceptualized a kaledic equilibrium that lasts a short while before it disintegrates and bursts.  Kaledic representation of economy represented a bounded indeterminacy of rival possibilities. He did not believe like Hayek or Mises that the economy had any long run tendency to equilibrate. Lachmann, Shackle’s student writes about this:

“Marshallian markets for individual goods may for a time find their respective equilibria. The economic system never does. What emerges from our reflections is an image of the market as a particular kind of process, a continuous process without beginning or end, propelled by the interaction between the forces of equilibrium and the forces of change. General equilibrium theory only knows the interaction between the former.”

*To be noted Shackle is critical of the existence of Marshallian equilibria too on the ground that it ignores income effects multiple simultaneous markets have. 

L. M. Lachmann. From Mises to Shackle: An Essay on Austrian Economics and the Kaleidic Society

On a closer reading one will see that this means, we could understand change in an economy without completely understanding how the cause was interacting with it. There are many directions to extend these into. For example, what this meant for value theory, learning and adaptive expectations,  role of rational expectations, stability of markets and how co-ordinating imagination could explain the existence of non-market or regulatory institutions. Shackle has other critiques of economic theory, especially its obsession with quantity as against form, its treatment of exchange value as a unit, scalarisation, reducing incommensurables to common terms, prices as mere conventions, etc. His book warrants reading and discussion in full. But of import to us was the idea that maybe the world changed before it equilibrated meaningfully in ways that made General Equilibrium theorisation very difficult. The information shortage and limitations of logic are more pronounced than we would want to believe. Most economic theory after Shackle disregards his writing as nihilist, but he had a point and he made it well.

What have we done thus far? We did not challenge methodological individualism. We theorized some aspects of rationality with respect to context, we tried to understand the role of rationality with regard to time and made some observations on classical probability in face of time uncertainty and contextual differences. Contextual diversity could not be disregarded in modeling and time was a “denial of the omnipotence of reason.”  What is then the role of rational-agent theories? And experimentation and RCTs? How do these continue to be useful? How do we rescue this epistemic description which is not objectively wrong from the charge of nihilism-that everything is subjective with respect to time and place and therefore theorisation is fruitless? This will be our endeavor in the last part. 

Marrying empirics and context the RCT way

There are diverse standards to determine what can be considered an empirically valid parametric of hypothesis inference. It mostly comes from statistics (1, 2, 3 ) but could also be different (as in 1, 2, 3, for example) based on diverse methods. 

RCTs offer a peek into well-identified causally linked relation-between one set of actions called an intervention onto another set of closed defined variables called outcomes. It has been sought after as a way to cut through an abundantly complex world, dissect it into small parts, study interactions there closely, compare them with another on average similar part and tell how the world changed. This method is deemed cleanly deductive. Quasi-experimental methods seek to do similar inference. (The other several issues are in this book are here, but that is for another day) 

But, lets suppose that all RCTs are ideal and give purely causal estimates of specific relations. Once we collate all the results from RCTs, there happen to be multiple issues in what is called generalizability. Generalizability incorporates four distinct aspects: scalability (1, 2) , adaptability-usability based on intrinsic quality of the intervention, external validity due to contextual challenge and  building a general theory of change. The associated epistemic challenge is how do we take swaths of RCT and causal research and inductively weave it into a story of what should be, what can be the problems and how to do it. I as a part of a team tried here to weave evidence, experience and data to create a starting point guide for policy discussions. Rachel Glennerster here argues that we use RCTs to understand mechanisms, then employ those mechanisms common across contexts. Then we tailor the intervention around the mechanism to fit the contextual requirements through deliberative processes. This involves an inductive funneling that looks like the following: 

RCT literature → Identify clean causally identified relations in research papers → Closely study their estimates and potential issues in design → collate multiple similar papers, or in other words experiment multiple times → identify the most common mechanisms and points of failure → Deliberate on those with experts having experience with this implementation → Reason out a story on effective mechanisms of effectiveness → Support it with mixed-methods observations about the contextual nitty-gritties -> Carefully translate it to policy-suitable, politically palatable idea with an underlying theory of change with examined mechanisms and points of failure. 

Let us quickly summarise the problems with doing this.

Problems of being an empiricist 

Empiricism begins with an idea that is sought to be tested. The idea could be a factual question or a hypothesis. The object of inquiry in that sense is theory-laden. The empiricist has to collate data in an interpretable form. Nature and structure of data is to be debated. Data could be large text, interviews, voice and audio or numerical. Economics with few notable exceptions collects and uses tabulated data described as relations between variables for each observation. It could vary over space, time and individual instances. 

Simply put, the empiricist then uses averages and rules to related averages to find differences, explain trends, and test theoretical statements and their logical implications. The data collection and use methodology is often disputed for reasons from outright fabrication (1, 2), chicanery like p-hacking to methodological issues with sampling, cross-validity, time, conceptual definition(1, 2) and also less understood reasons. It is difficult to classify data into binary bins. Especially data that will be used for counterfactual-conditional type of what-if analysis is very difficult to classify. Suffice it to say that all the answers are in the process of data generation and being able to say something about the quality of data from the data itself is rare, digging out skeletons is a part of an economist’s job. 

Summarily, an empiricist would proceed as follows: 

Real world → Identified relevant objects→ Ideas → Concepts → Numerical or categorical variable (if deductive) → Survey or accounting instrument → Data collection Process → Numerical data → Studying co-variance in an inferentially sound manner → Causally/ Parametrically sound estimation model → Output values (effect size) for relations, overall outcome, parameter estimates, stylized facts -> A local theory of change.

This is excellent where subject matter being studied remains fairly constant over multiple experiment iterations. Meta-analyses or systematic reviews work better in medicine because there is something concrete to be said about the precise mechanism and a variety of experiments can be collated together. In development, precise determination of mechanism can be hard because multiple moving pieces constitute a critical part of the success of what is being tested, when moving from causally determined pieces to a universal theory and economist’s knowledge of the space in between, his experience becomes crucial. The empirical is the part of the real, there are some surprise elements which can’t be pre-inferred and they can show up very easily in a new and different context. This makes iterative adaptation when using knowledge inevitable. Theorization about the *real* world is *always* incomplete. The literature is therefore a motivating point or the starting point as done here or here. Collecting frequent data to iterate as mentioned by Karthik here, for example furthers this aspect and therefore becomes inevitable for new generation organizations including governments to deliver. 

Some epistemic cautions in empirics

Finally, there are a few things to be said about connecting the empirical and the theoretical and using statistics in practice.  

1. The concept in theory has to be closely proximate with the variable being measured in statistics. E.g. Which index is an appropriate measure of price-level? If the concept and variable are very different and only distant proxies of each other, the analysis will be flawed. This divergence can create disputes. 

2. The variable should be measured at the right level of sub-economy and at time near enough to the present so that the measurement itself is granular enough to explain observable differences emerging from underlying characteristics which we understand poorly. E.g. 15 districts produce half of Indian GDP. (NFHS 2019)

3. Any proxy imputation by estimation must be heavily suspected and scrutinized.

4. Data is also abstract, it is constructed while being collected, can be and often is interpreted subjectively. It has to be read to mean only what it can mean but it can be used to mean what you want it to mean. The difference is in getting under the skin of data. 

5. Typified data can mean different things than what the type suggests. E.g. Rape counts in Delhi could often also be consensual couples trying to elope their family. It was classified as rape because that is what the FIR said. See this for more such examples. Such misclassification can lead to bad inference and worse theories. Carefully examine what the data is, and especially what it is not, examine the boundaries of the variable and distribution within those boundaries before using that variable for inference. 

6. Data is collected/generated with a purpose orientation. When using data for other than intended purposes, employ it extra carefully. There is a penchant to use “best available data”, but it might not always be advisable for two reasons: Data points become anchors of knowledge and might misguide intuition, data too old, or too different might convey neither average trend, nor movement around the trend nor distribution appropriately. But, we should not rush to reject any data before trying to identify its signal-noise ratio and direction and extent of bias. How to do that is an art. 

7. Null effects or effects indistinguishable from zero do not mean much for the intervention or the model, unfortunately. If sufficiently powered and precisely estimated they show that in the instant case, in the instant sample, some part of the intervention or the model failed and it is not seen to work/explain. That says nothing about the feasibility of the intervention or validity of the model elsewhere.

8. Precise causality of estimates is extremely difficult and rare and renders a large base of quantitative information useless. Some workarounds are sometimes found. E.g. An excellent narrative analysis provides some reasoning, a qualitative component guides understanding better, etc. Research studies have validity beyond the size and precision of the estimate. Pragmatic economists always use whatever information is available, caveat it abundantly and make sure their peers understand what is being done. 

9. Statistical validity and procedural sanctity for any quantitative estimate are critical to study. Qualitative studies either stand-alone or done as a part of quantitative studies of whatever rigor can provide a better grounding for overall complete comprehension. 

10. The question we ignored when trying to build a theory; i.e. about the fundamental nature of the content of the model, e.g. whether the model is representative agent; becomes important at the last step of this theory where we attempt to backtrack theoretical inference to the world if the data fits the predictions of the model. 

Inferential empiricism is important but so are descriptives. They can give us important facts to build our story on. Given the challenge associated with making empirical sense of the world and then projecting it onto the actual world, we are somewhat successful, but now always. What we understand from the empirical and what we can say about the actual are distinctly different. I propose that the empirical and actual world are different spheres with related but different ontological properties. In the next section I wish to substantiate the difference in ontological properties of the actual and the real world. What are these differences? Why do they emerge?

Institutions, context, details and applying theory

The world is second best, at best. -Unattributed. 

We do not understand what will become of a theory in a new context. A new context might absolutely mangle our theory and birth consequences we never intended. There is a constant back and forth between models and data. We examine our theory and the world simultaneously like Mary would suggest. When approaching a problem as a practitioner, the following become crucial:

• Understanding the empirical background in which one is to operate thoroughly. 

• Identifying the relevant facts and acknowledging theory ladenness of observation.

• Choosing the most parsimonious theory that is sufficiently lean but still has meat to stand by itself.

• Validating multiple theories statistically. Identifying the most critical assumptions based on which the application of the theories hinges.

• Double checking whether those factual assumptions are statistically validated.

• Listing rival hypotheses with subjective probabilities so that the decision maker pays attention even if the list is not omni-competent. 

Now, for understanding the empirical background and identifying the relevant analogues of assumptions in the world of operation, an intimate familiarity with that world becomes crucial. This is often also called the institutional setting or cultural background. It could refer to people’s outlook to any of the following in that setting for example:

Participation in economy and society, engagement with issues- extent and manner,  notions of morality (fairness, dominance, unkindness, loyalty, sanctity), formality of operation-contracting, branding, risk-attitude, presence and nature of hierarchies, creativity, professionalism, specialism, embeddedness- ingroup-, friction to foreign-ness and institutions within, norm-consistent behavior, interpersonal relations- kinship, social organization, attitude to labor, leisure and consumption, attitude to loss and compensation, violence, norms about expression of basic and higher cognition emotions, conviviality, relation with material-life and infrastructure objects, process of adaptation and evolution of norms, treatment of time, path-dependence, austerity, habits, rules and laws, etc.

Each of these is independently also an object of economic inquiry, but I mean these only in a general intuitive sense. We also scantly understand how these exactly interact to produce a system. All these characteristics apply to both human participants but also institutions. Institutions can through conscious self-reflection evolve to have their own characteristics. They might resist or enable change, be entrepreneurial or not, they might be inspirited or dud, they might prioritize merit or relations, they might have clearly defined goals and methods, they might be top-down or bottoms-up, they might have process-orientation or outcome-orientation. They might be person-centric or value-centric. Participation might be costly or free. It might moreover be easy or difficult to create and sustain institutions. They might break with size. We can also use economics to further break these down and understand the behaviors of actors as composite parts of these institutions themselves, but systems themselves have characteristic traits which need to be understood. But, Historicity is important. Language (1, 2) can be critical because for example it can explain how and how far a particular phenomena penetrate the conscience of that society, it might also define accessibility. 

Context involves more than institutions, people and culture. It involves geography and design too for example. Is it better to be in plains or coasts? How much does it rain? What crops can I grow? How deep do I need to dig for water? What's the slope of land like? Does the river water carry Hepatitis C virus? Does my business depend on parking space? Walkable promenades better? Floods? How about forests and related rights? How is the population arranged (For marathi readers interested in rural Maharashtra)? What is the historical distribution of things of value? What if there are too many cyclones? Which Gods do they worship and what festivals?

The more local we go, the less valuable averages are and the more salient these things become. Everything becomes everything. Settings differ and therefore they matter. One last point of import flows from this. Each economy has multiple embedded sub-economies. At which level we choose to study them matters. How those levels relate to each other matters too. Politics, trade, migration, public finance, monetary integration all determine the extent of integration and difference from other sub-economies. This gap between the real and the actual is perceptible but not fully comprehensible. I thus think a shift to a new paradigm in economic epistemology explicitly accepting these differences can be useful.

V. Critical realist Economics

The need for modeling arises from an epistemic angst. The observable and empirical does not exhaust ontology. Ontology of social experience underlying the economic endeavor becomes manifest, often rendering the economic empiricism an incomplete exercise. Humans transform social reality through continuous action on poorly understood or fully understood norms and in the process the norms themselves evolve. The need to build a demonstrable, consistent within our mind and therefore logical framework to explain economic phenomena is at odds with what our mind can understand about the world. This view is most commonly understood as critical realism. It is a departure on a skeptic or relativist worldview which would deny the possibility of knowledge. Critical realists understand the empirical to be a subset of the real and understandable world. 

Source: Somewhere on the internet, Thanks.

Critical realism espouses a layered understanding of the world. It takes the empirical to be a part of the actual world where mechanisms operate. The empirical is distinct from the actual because of our epistemic methods and their limitations. In the actual world observed mechanisms and their effects come into action. The real world on the other hand comprises deep lying structures and relations that birth social phenomena and events. These structures and their interrelation is mostly unobservable and can be penetrated only by a priori logic.

Critical realism is precisely between postmodernism skepticism in epistemology and a modernist positivism in methodology. Critical realists agree that there is an objective reality but the observable world that can be empirically studied is only a small part of the real world which remains impenetrable by direct perception. We can only conjecture about the happenings in the real world by understanding the empirical facts and their relations. Critical realists engage with four ideas seriously:  

1. A close attention to social ontology

2. Methodological Pluralism

3. Reflexivity on part of the researcher

4. Use of Retroduction (Testable educated guessing) along with induction and deduction

5. Focus on explaining generative mechanisms of causal relationships as against conjunctive relations themselves

It differs from holism in its lesser emphasis on interconnectedness of the world. As such it allows better focus on identifying individual mechanisms in the empirical and actual world rather than trying to study grand emergent ontological properties.  Our understanding of the world is enriched by plural methods to attempt to reveal the nature of ontology. It rejects reductionism into small parts. Critical realism also helps us avoid the fallacy of composition by distinguishing the actual from the real. It is a humble starting point that starts with ontology and structures methodology and epistemology to respond to the needs of such an ontology. 

Economics because of its early modern beginnings, victorian determinism and the post-structural contextualisation and constant search for empiricism, periodic renewal of vocabulary, value-neutrality outside of the singular utilitarian framework, grounding in mathematics as a way to impress our mind onto concepts, resultant engagement only with scalarity, early incorporation of and fundamental contribution to statistical thinking, functionality as an instrument to efficiently fund war and given an external push mainly from government to constantly search for difficult answers to crises has staunchly remained realist. It always acknowledged the possibility of objective knowledge and resisted relegation to relativism or skepticism, which in part explains its success. Critical realism embeds this positive modernist methodology into an epistemic humility. Critical realism can truly enable us to cross the river by feeling the stones. This becomes especially relevant in a data-scare world. This is a very valuable guide, especially for applied economics and policy relevant research. It holds substantial promise as economics continues to ask bigger questions and answer them with finer tools, multiple iterations and a wide variety of models. Economics, especially applied microeconomics has also unknowingly walked into the domain of critical realist understanding as was seen in all that we tried to understand in this article.

Critical realism in practice

For practitioners,  Dani Rodrik, writing in Economic Rules (see chapter 2) provides a good guide to a part of this. His approach to economic theory is a compromise between Friedman and Kremer. 

Use many models and often a combination of models -> Identify the critical assumptions -> Match those and the primary factual premises and direct and incidental logical implications of the model to the context- > Choose the appropriate model(s). 

More models, the merrier. The more mechanisms we understand and know to work the better. Rodrik proposes a method to undertake diagnostics of model suitability too. Rodrik also argues that RCT results should also be demonstrated as generalisable models by abstracting away some of the context. When we have modified the model and identified the best match we can also use multiple models to explain phenomena. (See here) Rajan argued for us to assume hobbesian anarchy and study institutions. Samrudha wrote an excellent post about it. This too can be fit in a critical realist endeavor.  

An explanation thus arrived at will then be iterated in the world of action, feedback sought and intervention tweaked and updated. That is because our understanding of the actual world is incomplete and that of the real world is nil.

Summary policy guidance: Generate alternatives, select the best, focus on co-evolution of the intervention with systemic needs assessed from time to time.

Insulate area of study and its relation with external world+ Institutions+ factual premise+ Modelled rational behavior(s)/ theories+ contextual insight+ feedback mechanisms+ Problem driven iteration + [Discussion and debate + generating new data]..  In loops.

This reminds me of Keynes writing about the ideal economist, he says: 

“The master-economist must possess a rare combination of gifts .... He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought.”

Become a process-thinker, context-thinker, institution-thinker, change-thinker, rational-thinker. Master rules and processes of rule formation and social dynamism. Humility could be a remarkable trait in economists given how much we are ignorant about, a critical realist perspective can help. If we end up believing that we know more than they do, we come close to what Taleb calls a platonic fold.

Like Shackle said: “An economist is a sailor. His model are the gridlines on the map.”  I add that data are his compass, concepts, boundaries, past and peers keep the ship guided and afloat. This ship though lives in the imagination of people, it sails, sinks and changes destination in that imagination. Embrace critical realism.

I can know economics, but my knowing is useful only insofar as readers like you make it to the end of this post and tell me all ways in which I am wrong. Thank you for reading.