Author: - Shweta Bilonikar
Trimester III, LLM ( FINANCIAL REGULATION)
Kirit P. Mehta School of Law, NMIMS, Mumbai
“No matter how capable our judges are, they cannot be effective unless adequate resources are provided” noted Michael L. Bender, Chief Justice, Colorado Supreme Court, United States of America, in his address on the state of the judiciary to a joint session of the General Assembly in 2011. This quote rightly justifies the current situation in India. When it comes to discussion on problems related to the judiciary in India, the most common problems discussed are about the pendency of litigations, lengthy court procedures, nuances and loopholes in law etc. We find various articles, research papers, news articles on these subjects. But one of the main reasons for these problems is the Financial Problems faced by the courts which are relatively less discussed.
For the smooth functioning of any institution, finance is the most important aspect and Indian courts are not an exception to this. Indian courts have always been affected by poor budgets and lack of financial planning. As a result, Indian courts lack in many ways like that of poor infrastructure, inadequate manpower, lack of basic facilities, poor work conditions etc. The budgets which are sanctioned by the government mainly focus on salaries and allowances of the judges and other administrative staff. Less importance is given to the infrastructure, increasing the capacity of courts, basic facilities etc. This results in the poor functioning of courts which is a source for other judicial problems.
In the recent ‘India Justice Report’ it has been concluded that there is a need for proper planning for budget allocation, proper utilisation for the funds allocated, and proper research is the need of the hour. Poor budgeting has impacted the smooth functioning of courts. Though India has one of the strongest judicial systems in the world, it still lacks in many ways as compared to other nations. The main reason for this improper budgeting. These financial problems lead to many other problems like delay in justice, case pendency, loss of trust in the judicial system etc.
2. BUDGET SYSTEM OF COURTS IN INDIA
The budget for Indian Judicial Department is included in the Union Budget sanctioned by the Finance Minister for each financial year. The centre as well as the state has the authority to sanction as per the requirements of the courts. The budget for the judiciary in India is bifurcated under various heads like allocation for salaries and allowances of judges, the allocation for infrastructure facilities, average court expenditure, the allocation for various government National missions for justice delivery and legal reforms, legal aid, e-courts etc.
This can be better explained by the example of Judicial Budget Allocation under different categories in the Union Budget 2020. This is an illustration for better understanding of the concept.
Allocation of Budget
Infrastructure facilities for judiciary including Gram Nyaylayas and other courts
National Mission for Justice Delivery and Legal Reforms
Funds for autonomous bodies like National Judicial Academy, Indian law institute etc.
National mission for safety for Women
Administration of Justice
From the amount sanctioned under various categories, the required money is allotted for different courts in India by the Centre and State respectively. An officer for each court is appointed to prepare a report for the financial needs of the courts. This report is made depending upon the requirements of the courts.
Budget allocation is decided by the finance minister. For this allocation, the previous year’s allocation of budget is considered and mechanical practice of incremental budgeting is carried out. No proper surveys are conducted to identify the actual needs of the judiciary. Hence, the financial needs of the courts are to be decided according to the budget sanctioned and not Visa versa.
3. FINANCIAL PROBLEMS
1. Inadequate allocation of Budget:
Inadequacy of budget is the major financial problem for the courts in India. In the recently released ‘India Law Report’, it was observed that no state or union territory in India, except Delhi, spent even 1% of its budget on the judiciary. This report reviewed budgets between 2011-12 and 2015-16. The average national spending of the judiciary in this period was 0.08% of GDP (Gross Domestic Product). This report was published by Tata Trusts, a philanthropic organisation in collaboration with six organisations.
2. Under- utilisation of Funds:
Inadequacy of funds is accompanied by under-utilisation of funds. It is seen that though funds are sanctioned they are not completely used. For example, India’s expenditure on legal aid was only 75 paisa per annum in the year 2017-18. Legal aid applies to 80% of the population in India.
3. Lack of Infrastructure:
The biggest problem Indian courts are facing today is that of low infrastructure. Infrastructure largely depends upon the financial status of the courts. There are less number of court halls, lack of basic amenities like toilets, canteens, furniture etc. this problem is mainly seen in lower courts like trial courts and district courts. In many places, it is seen that due to low infrastructure hearings are conducted in small rooms and the number of judges is more than the number of courtrooms. This also affects the efficiency of courts on a very large scale.
4. Litigation Pendency:
For the problem of litigation pendency in courts, factors like long court procedures, the inefficiency of judges etc. are often considered as responsible. But the core reason for this problem is the lack of monetary funds and poor infrastructure. Many times it becomes difficult for the judges to carry out their day to day tasks which in turn leads to the pendency of the cases.
The status of pendency of cases in various courts in the country
Supreme Court: 59,535
High Court: 45, 26,079
District and Subordinate Courts: 3, 15, 24,931
5. Fewer Recruitments:
Inadequate budgets restrict the capacity of courts. As a result, it becomes difficult to recruit the staff and judges for the court. There are high vacancies and low recruitments. Due to this, courts cannot be used in their full capacity which results in inefficiency and litigation pendency.
In the year 2019-20, out of 1079 high court judges, there are 401 posts of judges to be filled.
6. Excessive workload:
Due to lack of infrastructure and inadequate budgets, judges have to deal with the huge workload. This leads to inefficiency and lack of enthusiasm in the work which overall affects the delivery of justice.
7. Clashes between the centre and state governments:
The central government and the state government both have the authority to sanction funds for courts in India. It is often seen that delay in sanctioning of funds or inadequacy of funds is due to clashes between them. Both governments try to put the financial burden on each other.
8. No independent source of fund:
Though the judiciary in our country is an independent body, it does not have its financial source. The courts have to depend on the centre or the state government for their finances. Even the money collected by the judges in the form of court fees, fines and deposits in litigation is submitted to the Consolidated Fund of India.
9. Instability in the allocation of funds:
From the past judicial budget allocation for various categories, it is seen that there is instability in the allocation of funds. Some funds are increased while some are decreased. This can lead to confusion in the financial planning of courts.
Example: In the Union Budget 2020-21, the budget allocation for development of infrastructure in courts has been decreased from Rs.990 Cr. In 2019-20 to Rs. 762 Cr.
In 2020-21. Though infrastructure development is a very important aspect and is necessary for today’s condition.
4. IMPACT OF COVID-19 PANDEMIC ON COURT FINANCE
The current situation due to the Coronavirus pandemic has resulted in huge financial losses to courts in India as the courts were shut down due to the lockdown declared by the government, courts had to suffer financial losses as fines could not be incurred, development of infrastructure has come to a halt.
The pandemic has also led to the economic slowdown in the country. As a result, there are chances of reduction in judicial funds by the centre and the state governments post-pandemic. This may lead to an increase in current financial problems of the courts in addition to some new financial problems as an impact of a pandemic. A new financial problem that has already come to light is financial difficulties faced by the advocates due to online functioning of courts and reduction in the physical hearing of courts. The Supreme Court of India has taken suo motu cognisance of this problem.
A bench led by Chief Justice S.A. Bobde said the “unprecedented crisis” required an “unprecedented resolution” as it issued notices to the Bar Council of India, the Central Government, bar councils of all the States and Bar Association across the country to explore the possibility of setting up a relief fund for deserving and eligible advocates. The courts can also face infrastructural problems, increase in litigation pendency, less number of court filings etc. post-pandemic.
Finance is the most important aspect of the functioning of any institution. Without adequate finances, one cannot get the expected results from the institution and its purpose cannot be fulfilled. For the smooth functioning of our judicial system and proper delivery of justice, financial management in courts is extremely important. Financial problems like inadequacy of funds, underutilisation of funds, etc. lead to many other problems like lack of infrastructure, excessive workload, litigation pendency etc. one problem leads to others.
To overcome this, proper financial planning is necessary. The old ways of deciding judicial budgets must be replaced by new ways which are more scientific and based on the actual needs of the courts. For this, proper and adequate research needs to be undertaken. The budget allocation must be done according to the funds required in that category. Instability in the allocation of funds leads is also an important cause of financial problems faced by courts.
Concrete steps must be taken to overcome financial problems of courts so that the faith in the judiciary and India’s reputation as the largest and successful judicial system stays intact. Financial stability is necessary for proper and fair delivery of Justice.
 News Article “The Week”,
 India Justice Report 2019.
 Final Annual Report 2019-20 by GOI, Ministry of Law and Justice
 Final Annual Report 2019-20 by GOI, Ministry of Law and Justice.
 News Article: SC takes cognizance of lawyers’ financial woes, proposes setting up funds for donation. by Bhadra Sinha theprint.in accessed on 23/9/2020
1. Budgeting Better for Courts- August 2019, Authors: Chitrakshi Jain, Shreya Tripathi, Tarika Jain under VIDHI Centre for legal policy,
2. India Justice Report: the Ranking States on Police, judiciary, Prisons and Legal Aid. Published in October 2019 by Tata Trusts. Pdf,
3. News article ‘Inadequate budget for judiciary crippling reforms, hurting growth:’ Report by IndiaSpeed,
4. News Article ‘Budget 2020: Allocation for judiciary expenditure has reduced ‘ by Soni Mishra, published by ‘The Week’
5. News Article: ‘Union Budget 2020: Cinderella treatment once again for judiciary’ by M. J. Antony. Published by Business Standard,
6. News Article: SC takes cognizance of lawyers financial woes, proposes setting up funds for donation.by Bhadra Sinha the print.in.
7. Judicial Budgets: From Financial outlays to time-bound outcomes authors Avanti Durani, Rithika Kumar, Neha Sinha,
8. Annual Report 2019-2020 published by the Government of India, Ministry of Law and Justice. Pdf