Distinguished lawyer Harish Salve has held the Supreme Court of India the primary reason for the economic slowdown the country is currently experiencing. In an interview to a news website, Salve blamed the apex court for the slump in the economy stating that the slowdown was triggered by the court’s verdict in the 2G spectrum case in 2012.
Salve asserted that the top court’s order on 2G and coal allocation triggered foreign investors to exit from the Indian markets. The Supreme Court had in 2012 had invalidated the 122 spectrum licences granted to eight companies. Two years later, in 2014, the court also annulled all but four of the 218 coal block allocations from 1993 to 2011.
Salve contended that a blanket cancellation of allocation that happened in accordance with the rules set by the then government had a negative impact on the foreign investors who had to bear the brunt of the malfeasance of government authorities. “I can understand to hold people accountable for the wrong allocation but sweeping cancellation of licenses where foreigners are investing can have a catastrophic effect. When a foreigner invested, it was your rule mandating him/her to have an Indian partner,” Salve said.
Salve continued, “The foreigner investor had no inkling of how its Indian partner had secured the license. They had invested billions in the Indian market but the apex court, with one stroke of a pen, knocked all of them out. That’s when the slowdown in the economy started.”
Enunciating the disastrous effect of the court’s intervention had in the coal sector, Salve said that the blanket cancellation of coal allocations, without getting into the nitty-gritty of individual cases and assessing them on their merit has resulted in indefinite closing down of the coalfields. “Cancellation of coalfield meant that India had to import coal. The prices of Indonesian coal and other world coal reduced as the demand of import increased. The investment in the coal industry considerably declined. Lakhs of people lost their jobs. The economy was put under severe stress,” he said. Salve believes that the cancellation of coal block allocation had costed the country 1 per cent plus of GDP.