New Delhi: India ranked 66th among 113 countries in the sixth World Justice Project’s Rule of Law Index—better than its BRICS peers China (80) and Russia (92), but below Brazil (52) and South Africa (43).
The country improved its ranking by three positions, according to the report released on Thursday. It stood 59 out of 102 countries last year.
The report calculated the change in rankings by comparing the positions of the 102 countries analysed in 2015 with the rankings of the same 102 countries in 2016, excluding the 11 new indexed in 2016.
Rule of law in a country affects business environments, public works, public participation and conflict resolution, the report said.
“It is the foundation for a system of rules to keep us safe, resolve disputes, and enable us to prosper,” the report said.
Faraz Sagar, a Mumbai-based dispute resolution partner at law firm Trilegal, said: “Any business that wants to invest in a country looks at a number of essential factors—including certainty in the rule of law and efficient enforcement of the law to protect its rights and interests.”
The rule of law index relies on eight factors—constraints on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice, and criminal justice—to come to a finding. Informal justice is another criterion the report looks at. The scoring is based on responses from 1,000 people living in three largest cities in the country. In India, experts from Mumbai, Delhi and Bengaluru were chosen as respondents.
India ranked 77 out of 113 countries for regulatory enforcement and 93 out of 113 for civil justice. To assess civil justice, the report relies on parameters like effectiveness of enforcement, presence of alternate dispute resolution mechanisms, absence of government influence, and no corruption. Ranking on regulatory enforcement, similarly, relies on effectiveness of enforcement, no unreasonable delay, respect for due process and no expropriation without adequate compensation.
India is trying to attract investors and foreign expertise into the country. These rankings reflect a need to improve on regulatory requirements and better enforcement.
“If India ranks low on a rule of law index, then it’ll impact businesses and foreign investors because they’ll think twice about bringing their business here as the risk of investing becomes unacceptable. Further, for existing businesses the cost of compliance goes up. But most essentially the overall reputation of the country takes a hit, which is never a good thing,” Sagar said.
India ranked high on open government (28/113) and constraints on government (35/113). Denmark was ranked No. 1, followed by Norway and Finland, meaning they had the greatest adherence to rule of law. The US stood 18th and the UK was placed at No. 10, while Afghanistan (111th), Cambodia (112th) and Venezuela (113th) were at the bottom of the rung.