📰 Tamil Nadu tops food safety index
Gujarat, Maharashtra take top slots
•Tamil Nadu topped the State Food Safety Index (SFSI) this year, followed by Gujarat and Maharashtra. Among the smaller States, Goa stood first, followed by Manipur and Sikkim.
•Among the Union Territories, Jammu and Kashmir, Delhi and Chandigarh secured the first, second and third ranks.
Winners felicitated
•Health Minister Mansukh Mandaviya felicitated the winners on Tuesday.
•The SFSI measures the performance of States on the basis of five parameters set by the Health Ministry. The rating is done by the Food Safety and Standards Authority of India (FSSAI).
•Speaking on the occasion of World Food Safety Day, Dr. Mandaviya said the States had an important role in ensuring food safety and healthy food practices. “We should come together to build a healthy nation.”
•Dr. Mandaviya further launched various innovative initiatives by the FSSAI, including the ‘Eat Right Research Awards and Grants – Phase II’, Eat Right Creativity Challenge – Phase III, a school-level competition, and the logo for AyurvedaAahar.
The time may have come to reconsider having Governors as university Chancellors
•The West Bengal government’s decision to make the Chief Minister the Chancellor of State-run universities, instead of the Governor, appears to be an outcome of the severely strained relations between Governor Jagdeep Dhankhar and Chief Minister Mamata Banerjee. They have often differed on issues concerning the appointment of Vice-Chancellors and the functioning of universities. Mr. Dhankhar had alleged that VCs were appointed without the approval of the Chancellor, the appointing authority; on some occasions, VCs had not turned up for a meeting with the Governor-Chancellor. Friction has arisen elsewhere too. Tamil Nadu recently passed Bills to empower the State government, instead of the Chancellor, to appoint VCs. It also passed a separate Bill to establish a new university for alternative systems of medicine with the Chief Minister as its Chancellor. The Bills are yet to receive the Governor’s assent. In Kerala, there is a different kind of controversy, with Governor Arif Mohammed Khan asking the Chief Minister to take over the Chancellor’s role in the light of alleged political interference in the functioning of universities. These developments underscore that the conferment of statutory roles to Governors may be a source of friction between elected regimes and Governors who are seen as agents of the Centre.
•The original intent of making Governors hold the office of Chancellor and vesting some statutory powers on them was to insulate universities from political influence. Even in the 1980s, as noted by the Justice R.S. Sarkaria Commission, the use of discretion by some Governors in some university appointments had come in for criticism. It acknowledged the distinction between the Governor’s constitutional role and the statutory role performed as a Chancellor, and also underlined that the Chancellor is not obliged to seek the government’s advice. However, it did say there was an obvious advantage in the Governor consulting the Chief Minister or the Minister concerned. The Justice M.M. Punchhi Commission, which examined Centre-State relations decades later, was quite forthcoming in its 2010 report. Noting that the Governor should not be “burdened with positions and powers... which may expose the office to controversies or public criticism”, it advised against conferring statutory powers on the Governor. It felt that the practice of making the Governor the Chancellor of universities ceased to have relevance. Quite presciently, it took note of the potential for friction: “... Ministers will naturally be interested in regulating university education, and there is no need to perpetuate a situation where there would be a clash of functions and powers.” The time may have come for all States to reconsider having the Governor as the Chancellor. However, they should also find alternative means of protecting university autonomy so that ruling parties do not exercise undue influence on the functioning of universities.
📰 Of what good is a bad bank?
How does the piling up of non-performing assets affect the functioning of a bank? Have bad banks been set up in other countries?
•The Finance Minister on Monday announced that the National Asset Reconstruction Company (NARCL) along with the India Debt Resolution Company (IDRCL) will take over the first set of bad loans from banks and try to resolve them.
•A bad bank is a financial entity set up to buy non-performing assets, or bad loans, from banks. The aim of setting up a bad bank is to help ease the burden on banks by taking bad loans off their balance sheets and get them to lend again to customers without constraints.
•Many critics have pointed to several problems with the idea of a bad bank. Former RBI governor Raghuram Rajan has been one of the fiercest critics of the idea, arguing that a bad bank by the government will merely shift bad assets from the hands of public sector banks, which are owned by the government, to the hands of a bad bank, which is again owned by the government.
•The story so far: Finance Minister Nirmala Sitharaman on Monday announced that the National Asset Reconstruction Company (NARCL) along with the India Debt Resolution Company (IDRCL) will take over the first set of bad loans from banks and try to resolve them. While the problem of bad loans has been a perennial one in the Indian banking sector, the decision to set up a bad bank was taken by the Union government during the Budget presented last year in the aftermath of the nationwide lockdowns, and the moratorium was subsequently extended to borrowers by the Reserve Bank of India (RBI).
•It should be noted that the health of the balance sheets of Indian banks has improved significantly over the last few years with their gross non-performing assets (GNPA) ratio declining from a peak of 11.2% in FY18 to 6.9% in Q2FY22.
What is a ‘bad bank’?
•A bad bank is a financial entity set up to buy non-performing assets (NPAs), or bad loans, from banks. The aim of setting up a bad bank is to help ease the burden on banks by taking bad loans off their balance sheets and get them to lend again to customers without constraints. After the purchase of a bad loan from a bank, the bad bank may later try to restructure and sell the NPA to investors who might be interested in purchasing it. A bad bank makes a profit in its operations if it manages to sell the loan at a price higher than what it paid to acquire the loan from a commercial bank. However, generating profits is usually not the primary purpose of a bad bank — the objective is to ease the burden on banks, of holding a large pile of stressed assets, and to get them to lend more actively.
What are the pros and cons of setting up a bad bank?
•A supposed advantage in setting up a bad bank, it is argued, is that it can help consolidate all bad loans of banks under a single exclusive entity. The idea of a bad bank has been tried out in countries such as the U.S., Germany, Japan and others in the past.
•The troubled asset relief program, also known as TARP, implemented by the U.S. Treasury in the aftermath of the 2008 financial crisis, was modelled around the idea of a bad bank. Under the program, the U.S. Treasury bought troubled assets such as mortgage-backed securities from U.S. banks at the peak of the crisis and later resold it when market conditions improved. It is estimated that the Treasury through its operations earned a nominal profit of anything between $11 billion to $30 billion, although some contest these figures.
•Many critics, however, have pointed to several problems with the idea of a bad bank to deal with bad loans. Former RBI governor Raghuram Rajan has been one of the fiercest critics of the idea, arguing that a bad bank backed by the government will merely shift bad assets from the hands of public sector banks, which are owned by the government, to the hands of a bad bank, which is again owned by the government. There is little reason to believe that a mere transfer of assets from one pocket of the government to another will lead to a successful resolution of these bad debts when the set of incentives facing these entities is essentially the same.
•Other analysts believe that unlike a bad bank set up by the private sector, a bad bank backed by the government is likely to pay too much for stressed assets. While this may be good news for public sector banks, which have been reluctant to incur losses by selling off their bad loans at cheap prices, it is bad news for taxpayers who will once again have to foot the bill for bailing out troubled banks.
Will a ‘bad bank’ help ease the bad loan crisis?
•A key reason behind the bad loan crisis in public sector banks, some critics point out, is the nature of their ownership. Unlike private banks, which are owned by individuals who have strong financial incentives to manage them well, public sector banks are managed by bureaucrats who may often not have the same commitment to ensuring these lenders’ profitability. To that extent, bailing out banks through a bad bank does not really address the root problem of the bad loan crisis.
•Further, there is a huge risk of moral hazard. Commercial banks that are bailed out by a bad bank are likely to have little reason to mend their ways. After all, the safety net provided by a bad bank gives these banks more reason to lend recklessly and thus further exacerbate the bad loan crisis.
Will it help revive credit flow in the economy?
•Some experts believe that by taking bad loans off the books of troubled banks, a bad bank can help free capital of over ₹5 lakh crore that is locked in by banks as provisions against these bad loans. This, they say, will give banks the freedom to use the freed-up capital to extend more loans to their customers. This gives the impression that banks have unused funds lying in their balance sheets that they could use if only they could get rid of their bad loans. It is, however, important not to mistake banks’ reserve requirements for their capital position. This is because what may be stopping banks from lending more aggressively may not be the lack of sufficient reserves which banks need to maintain against their loans.
•Instead, it may simply be the precarious capital position that many public sector banks find themselves in at the moment. In fact, many public sector banks may be considered to be technically insolvent, as an accurate recognition of the true scale of their bad loans would show their liabilities to be far exceeding their assets. So, a bad bank, in reality, could help improve bank lending not by shoring up bank reserves but by improving banks’ capital buffers. To the extent that a new bad bank set up by the government can improve banks’ capital buffers by freeing up capital, it could help banks feel more confident to start lending again.
📰 The shadows over global growth recovery are long
The developing economies have to prepare for tighter financial conditions and spillovers from geopolitical volatility
•Though it was not a full recovery from the aftershocks of the COVID-19 pandemic, the global economy was on the mend until the invasion of Ukraine by Russia. Economic prospects have worsened since then, exacerbating the divergence between the economic recoveries of advanced economies and those of the developing ones. The prevailing uncertainties in global growth prospects come in the aftermath of frequent disruptions to worldwide supply chains in the last two years with recurrent lockdowns in key manufacturing hubs, creating supply bottlenecks.
•As a consequence of the current situation, two key macroeconomic variables have a persistent effect on growth rebound. First, there is a tenacious price pressure, leading to policy trade-offs especially in developing economies; and second, there have been capital outflows and a tightening of financial conditions, affecting investment and growth in the medium and long term.
Inflation concerns
•Globally, inflation has become a central concern. In some of the advanced economies, it has reached its highest level in the last 40 years. According to the International Monetary Fund (IMF), “inflation is expected to remain elevated for longer”. For 2022, it says “inflation is projected at 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies and in 2023 it is projected at 2.5 percent for the advanced economy group and 6.5 percent for emerging market and developing economies”. So, for the immediate foreseeable future, commodity prices, oil and gas prices, and with a lag, food prices, would remain high. The major contributors to high inflation are energy and food prices. A spike in oil and gas prices due to a tight fossil fuel supply and geopolitical uncertainty have led to substantial increases in energy costs worldwide. In developing economies, rising food prices have had cascading effects, culminating in higher overall inflation. This gets intensified if poor weather hits harvests and rising oil prices drive up the cost of producing and transporting fertilizers.
Impact on households
•In developing economies, higher prices for food impacts different sections of the population differently, depending on the types of food consumed and the share of food expenditure in a household’s consumption basket. Households in the low-income strata often consume diets with just one type of grain and are particularly vulnerable to price changes. Higher energy prices affect cereal prices as a result of rising transportation costs and increased input prices such as fertilizers. This is aggravated by shortages due to disruptions in agricultural inputs (especially fertilizers) which impact supply and market availability. Persistent short supply and increases in food and fuel prices could significantly increase the risk of social unrest as the poorer sections are pushed to the edge of heightened deprivation.
Capital outflows
•Apart from inflation, the other macroeconomic factor impeding growth recovery is the sudden spurt in capital outflows from emerging markets and developing economies. Capital outflows have increased in recent months. Emerging markets suffered their first portfolio outflows in a year in March 2022. The Institute of International Finance (IIF) says “foreign net portfolio outflows for emerging markets came to $9.8 billion in March. Developing stocks lost $6.7 billion, while bonds saw $3.1 billion depart. Investors have become more selective, as higher risk sensitivity mounts due to tighter monetary conditions and rising inflation. Moving forward we see greater volatility on flows dynamics, as some countries have bottomed up and could potentially benefit from higher commodity prices but may also be greatly exposed to risk factors”. Interest rates tightening in the United States is associated with capital flow reversals from emerging markets. For developing economies, the result of sudden large capital outflows is currency depreciation and tighter external sector conditions, leading to growth fluctuations. To complicate matters, domestic fiscal policy space has already been eroded in many developing countries by COVID-19-related spending. The increase in global interest rates will further reduce this contracted fiscal space in many economies.
Policy options
•Though the factors contributing to high inflation (energy and food prices which are driven by global supply shocks) are beyond the control of central banks, they need to carefully monitor the pass-through of rising international prices to domestic inflation to calibrate their responses. It is also imperative that the pace of policy tightening needs to be attuned to prevailing economic situations and activity levels. Central banks could also signal a readiness to shift the monetary stance to maintain the credibility of their inflation-targeting frameworks by clearly communicating the importance of inflation stabilisation in their objectives and backing it with policy actions. As sudden capital flow reversals can threaten financial stability, foreign exchange interventions could address market imbalances.
•As the IMF’s ‘World Economic Outlook’ makes it clear, data from developing countries show that debt levels have touched an all-time high following a huge fiscal expansion in many countries during the novel coronavirus pandemic. Massive expenditure programmes directed toward the health sector and income support measures had become necessary as part of such fiscal expansion. There exists an imperative to prune expenditure and get back to the road of fiscal consolidation. However, a push for consolidation should not prevent governments from prioritising spending to protect and help vulnerable populations affected by price increases and the pandemic. Expenditure pruning should encompass targeted income support measures that can be used to alleviate stress on household budgets. Such measures should be designed to deliver maximum relief to the most vulnerable at lower costs.
Safety nets needed
•In the post-pandemic global economy, there will be a likely cross-sectoral labour reallocation. Economies are bracing for transitions and the energy transition could be the most significant one. These transitions require labour market and income support policies that are designed to provide safety nets for workers without hindering employment growth. Along with temporary public support for displaced workers, training programmes and hiring subsidies should remain a priority. The message from the current phase of global growth is clear. Policymakers in the developing economies have to prepare for tighter financial conditions and spillovers from geopolitical volatility. Pockets of elevated vulnerabilities within sections of the population have to be identified for early action and a set of selected prudential tools to target them needs to be devised.
📰 The weight of the GST Council ruling
The Supreme Court judgment is a treatise on the democratic and federal imports of the GST legislations
•In Union of India Anr. vs Mohit Minerals Pvt. Ltd., the Supreme Court of India on May 19, 2022 while deciding on a petition relating to the levy of Integrated Goods and Services Tax (IGST) on ocean freight paid by the foreign seller to a foreign shipping company, ruled, “The recommendations of the GST Council are not binding on either the Union or the States...”. While the issue before the Court was with reference to the levy of IGST on a particular transaction, the question is why should the Supreme Court of India have to deliberate at length on the nature of recommendations of the GST Council?
•Some States have rejoiced over the ruling and said that this has restored the autonomy of States to legislate on GST.
As a ‘super body’
•Immediately after the pronouncement of the judgment, the Revenue Secretary of the Government of India said: “... (this) reiterates the scheme of things in the constitution and the GST laws... the council will continue to work in future the way it has worked in the last 5 years.” This creates the notion that the Union government is in agreement with this ruling and there is no question of law in this regard.
•On the contrary, the Union government (represented by the Additional Solicitor General) submitted to the Supreme Court in this case that the recommendations of the GST Council are binding on the executive and the legislature while they frame laws relating to the GST by the power under Article 246A. Thus, the Government of India was of the opinion that the GST Council could function as a super Parliament/Assembly by sending binding recommendations on laws, rules and regulations with reference to the GST to the Union and State governments.
•Article 246A gives powers to the Union and State governments simultaneously to legislate on the GST. In other words, the two tiers of the Indian Union can simultaneously legislate on matters of the GST (except the IGST, which is in the legislative domain of the Union government); obviously it can be inferred that neither of the legislations can supersede each other.
Overridden in some cases
•Article 279A stipulates the creation of the GST Council and its functions. The Council has to function as a platform to bring the Union and State governments together, and as a mark of cooperative federalism, the Council shall, unanimously or through a majority of 75% of weighted votes, decide on all matters pertaining to GST and recommend such decisions to the Union and State governments. The purpose of GST, as a harmonised commodity tax, is to make India a single market. The Government of India further argues, “Neither can Article 279A override Article 246A nor can Article 246A be made subject to Article 279A.” However, cooperative federalism is to operate through the GST Council to bring in harmony and alignment in matters pertaining to the GST from both governments. Given this background, the Union government had almost delegated the powers to create laws under the GST Act Section 5(1) to the GST Council through repeated use of the phrase “notification on the recommendation of the (GST) council”. Hence, the constitutional validity of the Council’s recommendation should be upheld; generally, the recommendations of the GST Council could be overridden only in exceptional cases, as argued by the Additional Solicitor General.
•While the respondents in this case were represented by several senior lawyers, hardly anyone made a substantive response to the issue of the supremacy of the GST Council in this matter. However, the judges of the Supreme Court have spent nearly a third of the 152-page order to deliberate and resolve this issue. Section C of this order gives an elaborate history of the constitutional amendment to bring GST as a tax that could be simultaneously legislated by the Union and State governments. It is a treatise on the democratic and federal imports of the GST legislations.
There is a clear line
•In 2013, while replying to a query from the Standing Committee on Finance that was debating the 2011 Constitutional Amendment Bill, the Attorney General emphatically said, “The powers of the legislature over the Finance are sacrosanct and are not affected by the setting up of the GST Council.” Thus, in the beginning of the debate on Constitutional Amendment to bring in GST, the clear line of demarcation of powers between the legislature and the GST Council was drawn. However, the issue of conflict between the Union and State governments has to be resolved on a platform such as the GST Council.
•The judges of the Supreme Court have recorded, “Since the Constitution does not envisage a repugnance provision to resolve inconsistencies between the Central and State laws on GST, the GST Council must ideally function, as provided by Article 279A(6) in a harmonised manner to reach a workable fiscal model through cooperation and collaboration.”
•The fact that the Union government holds one-third weight for its votes and all States have two-thirds of the weight for their votes, gives automatic veto power to the Union government because a resolution can be passed with at least three-fourths of the weighted votes. This imbalance in the voting rights between the Union and State governments, makes democratic decision-making difficult. Further, though all the States are not equal in terms of tax capacity, everyone has equal weight for their votes. This creates another political problem as the smaller States with lesser economic stakes can be easily influenced by interest groups.
Debates are more political
•Of course in this context, the debates in the GST Council will be on political lines rather than on the economics of taxation; the GST Council has borne witness to several such instances. When the States governed by Opposition parties are vocal on counter-points, the States governed by the same party at the Union government are mute spectators. It is a fact that States have not got full compensation for the shortfall in GST revenue collection during the COVID-19 pandemic period and that States wanted to extend GST compensation beyond June 2022 given the current recession and widely expected slow growth in effective revenue under the GST. The Union government and States ruled by the Bharatiya Janata Party and its alliance partners were not cooperating with States ruled by Opposition parties in reaching an amicable resolution on the issues of compensation during the pandemic period or even for debating the extension of compensation cess after June 2022.
•If the contestations are healthy in a federation (and even in such circumstances), it requires extraordinary political acumen and statesmanship from all leaders to strike a balance between the autonomy of legislatures and compromise for obtaining a harmonised commodity tax system. The nuanced understanding of cooperative federalism shows that there is no space for one-upmanship in either of the two tiers of the Indian federal government and particularly for the Union government under a quasi-federal Constitution. Clause 6 of Article 279A reflects this spirit: “While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of GST and for the development of a harmonised national market for goods and services”. In an atmosphere of a non-cooperative Union and State governments, the fear that the GST Council would break down is not unfounded; the responsibility lies on all governments equally, contrary to what the weighted votes reflect.
•Given these arguments, the Supreme Court of India adjudicated that the GST Council’s recommendations are non-qualified and the simultaneous legislating powers of the Union and State governments give only persuasive value to the Council’s recommendations. The power of the recommendations rests on the practice of cooperative federalism and collaborative decision-making in the Council.
•Therefore, the submission of the Union government to the Supreme Court of India that the GST Council’s recommendations are binding on Parliament/Assembly can be construed as a precursor for a wilful giveaway of the legislative power on commodity taxation to the GST Council which is not the forum for the direct representatives of the people to legislate on any matter. Given the lopsided power structure favouring the Union government in the GST Council, it is against the spirit of democracy and federalism that the finances of governments can be left to such bodies. Finally, it is pertinent to understand that in a democracy, the power to legislate is given to Parliament/Assembly by its people who have curtailed their private autonomy to accept collective decisions. John Locke, the 17th century English philosopher and liberal thinker persuasively said, “The legislative cannot transfer the power of making laws to any other hands: for it being but a delegated power from the people, they who have it cannot pass it over to others....”
📰 Crime and copyright infringement
Making copyright infringement a cognisable offence will pave the way for police to impinge on civil liberties
•The Supreme Court of India has passed a far-reaching judgment resolving the question of whether copyright infringement, which is punishable with imprisonment for a term which may extend up to three years under the Copyright Act of 1957, is a cognisable offence under the Code of Criminal Procedure (CrPC), 1973. While the Knit Pro International v. The State of NCT judgment is sparse in its reasoning, its conclusion is clear: copyright infringement is a cognisable offence under the CrPC.
•In simple English, this means that the police can begin investigations into allegations of copyright infringement on receiving a complaint. If the court had held copyright infringement to be a non-cognisable offence, the police could have started investigations only after a judicial magistrate had taken cognisance of the offence and directed the police to initiate an investigation. The immediate consequence of this judgment is that many copyright owners, especially in the software and music industries, will use the threat of police involvement to scare potential infringers, to extort licence fees in excess of the amount payable in a scenario where the police cannot get involved without prior judicial authorisation. As a result of the offence being made cognisable and non-bailable, it takes away the right of the accused to post a bail bond with the police and shifts the responsibility on to the courts for judicial determination on a case-by-case basis.
Tricky questions of law
•There are several reasons to be sceptical about allowing the police to begin criminal investigations into copyright infringement. To begin with, unlike trademark law, it is not mandatory under the Copyright Act to register copyrights as a necessary precondition in order to enforce the same. Rather, a copyright is created the moment a piece of art or music or literature is fixed on a medium, provided it is original. Now, whether or not the said piece of art or music or literature is in fact ‘original’ is another complicated question of law, especially since a 2008 Supreme Court judgment. Even presuming that the question of originality is undisputed, there is the question of whether the use of the copyrighted work is permissible under all the provisions in Section 52 of the Copyright Act outlining the limitations and exceptions to copyright infringement. One of the provisions in Section 52 deals with ‘fair dealing’, which in itself a vexatious question of law. Then there are special clauses under the Copyright
Act which extinguish copyright in copyrighted works in certain circumstances — for example, if a work is qualified for protection under the Designs Act of 2000, it can no longer claim protection under the Copyright Act once it is reproduced beyond a certain threshold. Even the very question of determination of copyright infringement would require the court to apply the test of substantial similarity (both qualitative and quantitative) on a case-by-case basis.
•Any investigation by the police into copyright infringement will have to take into account all of the above issues, many of which have vexed the most experienced of lawyers, judges and academics. As a country, do we have faith in the ability of the average police sub-inspector, given their present levels of training and funding, to conduct an efficient investigation into copyright infringement, particularly on complicated questions of law? We think not.
•The deeper question that requires a re-look is the criminalisation of copyright infringement in India. In 1914, when the British extended the Imperial Copyright Act, 1911, to India, copyright infringement was punishable only with a monetary fine. It was independent India that introduced imprisonment for one year as punishment for the offence of copyright infringement in 1957. Since then, the prison term for copyright infringement has been tripled by Parliament to three years.
•India’s international law obligations under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) do not require India to criminalise all kinds of copyright infringement. Article 61 of the TRIPS agreement requires criminal measures to be applied for at least “wilful copyright piracy” on a “commercial scale”. Although the term copyright piracy itself remains undefined in TRIPS, a World Trade Organization panel in the China — Enforcement of intellectual property rights dispute observed that the law does make a distinction between copyright infringement and copyright piracy. In fact, the panel cited negotiating documents to show that the term infringement of copyright on a commercial scale was specifically rejected. Consequently, all piracy of copyrighted works is an act of infringement, but all infringement cannot be termed as piracy. So, for example, a person indulging in the mass reproduction of copyrighted books without the authorisation of the copyright owner would be guilty of copyright piracy. On the other hand, a dispute between two publishing houses on similar content in their textbooks would qualify only as copyright infringement and not copyright piracy. This is an important distinction made in TRIPS because most cases of copyright infringement not amounting to copyright piracy involve tricky questions of law. Establishing guilt beyond reasonable doubt is almost impossible in such cases, given the ambiguity of the law. Why then do we insist on criminalising conduct, where it is not possible for reasonable persons to know with some degree of certainty whether certain acts qualify as criminal conduct, particularly when civil remedies are available?
Criminalising conduct
•At best, the Indian Copyright Act makes a distinction between commercial and non-commercial infringement by allowing the courts to impose a sentence of less than six months or a fine of less than ₹50,000. But it does not simply decriminalise acts of infringement that are non-egregious in nature, except where a building/structure is allegedly violating a copyrighted work (for example, in drawings). As a result, almost every Bollywood production house that delivers a box-office success inevitably faces criminal investigations by police forces because of criminal complaints filed by scriptwriters who claim that the ‘hit’ was based on a script written by them. These cases can then drag out for years. For example, Rakeysh Omprakash Mehra was discharged in November 2021 by a judicial magistrate in Aurangabad in a case of copyright infringement filed by a scriptwriter who claimed that Rang De Basanti, which released in 2006, was in fact based on his script.
•Unless the law is amended to not only differentiate between the different acts of copyright infringement but also require prior judicial cognisance as a precondition of criminal investigation by the police, the Supreme Court’s recent decision will pave the way for the police to impinge on civil liberties, impede the ease of business and have chilling effects on free speech.
