GST will create an integrated national market, boost domestic demand, opportunities for Indian business and drive job creation - PM

By Vijay Kumar

PRIME Minister Narendra Modi, addressing the valedictory session of the National Initiative towards Strengthening Arbitration and Enforcement in India, yesterday said that our domestic market has been fragmented. Different taxes across different states have made goods and services more expensive. This has hampered growth in inter-state commerce. We are enacting a Goods and Services Tax law, to create an integrated national market. This will further boost domestic demand, create more opportunities for Indian business and drive job creation.

In a rare brief speech full of wisdom, delivered in impeccable English, the Prime Minister said,

India is today the fastest growing major economy, and one of the most attractive destinations for FDI. Indeed, we stand out as a bright spot in the global economy. This is the result of India's fundamental strengths: democracy, demographic dividend and demand. We need to fully harness these strengths. This can happen only if businesses make long-term investments that create jobs and sustain economic growth.

Innovative business models and app-based start-ups have instilled a spirit of enterprise among Indians. Yesterday's job seekers are becoming today's job creators. The legal profession is also opening up to the promises of the digital world. From cause-lists to case-laws, the lawyer's library is now just a click away on your mobile phone.

Businesses seek assurance of the prevalence of rule of law in the Indian market. They need to be assured that the rules of the game will not change overnight, in an arbitrary fashion. And that commercial disputes will be resolved efficiently. A robust legal framework backed by a vibrant arbitration culture is essential.

However, legal reforms can deliver desired results only when there is an effective and efficient dispute resolution mechanism. The independence of the judiciary is a basic feature of the Indian Constitution. Common citizens as well as businesses repose immense faith in the integrity of the judicial process. Our Government has taken various initiatives to improve the judicial infrastructure and administration.

Our Government has been working on a strategy for convergence of existing tribunals. This will help transform the existing complicated tribunal system into a simpler structure.

We need to simultaneously facilitate a vibrant ecosystem for alternate dispute resolution, including arbitration, mediation and conciliation. This will provide additional comfort to investors and businesses. More importantly, it will also ease the case-load on Indian courts.

Resolution of disputes through arbitration is not new to us. In ancient India, there were several mechanisms for settlement of disputes between the parties. These included the Kulani, or village council; Sreni, or corporation; and Puga, or assembly. Likewise, commercial matters were decided by Mahajans and Chambers.

Today, corporates and financial institutions want legal experts who can help close business deals and transactions without any disputes and litigations. If a dispute arises, corporates want to resolve them quickly through arbitration, without going to courts. For this, they require specialized arbitration lawyers. Alternative dispute resolution processes also preserve personal and business relationships that might otherwise be damaged by the adversarial process.

India has no dearth of brilliant lawyers and judges. India also has a large number of retired judges, engineers, and scientists who can function as competent arbitrators in various fields. India's economic interests shall be better served by a higher number of arbitration experts and lawyers. This in turn requires widening the ambit of legal education in India. There is need to develop specialized arbitration bar associations. We also need professionally run arbitral institutions which can deliver international standards of services at reasonable costs to businesses in India. We welcome internationally recognized institutions in this effort.

We must deliberate on ways and means to supplement the efforts of the judiciary and arbitration mechanisms. Mediation is one such mechanism, the potential of which has not been utilized much in the country. An enabling alternate dispute resolution ecosystem is a national priority for India. We need to promote India globally as an arbitration hub. As Roscoe Pound famously remarked, "The law must be stable but it must not stand still." We need to take inspiration from beyond our shores.

The PM says, "Government has been working on a strategy for convergence of existing tribunals". It is learnt that CESTAT will be subsumedin ITAT.