“The market reforms have not infringed the basic structure of the Constitution of India, but have largely compromised the realisation of the ideals of social and economic justice.” Comment.

Constitutional Validity of Market Reforms

The doctrine of the ‘basic structure’ of the Constitution, established in the Kesavananda Bharati v. State of Kerala (1973) case, prevents the Parliament from altering the fundamental features of the Constitution. Subsequent judgments have clarified that economic reforms, even those involving significant changes in property rights or economic policies, do not necessarily infringe upon this basic structure. The judiciary has generally adopted a pragmatic approach, recognizing the need for economic development while upholding constitutional principles.

The reforms have largely been implemented through legislative amendments and executive actions, falling within the Parliament’s constituent power. For instance, amendments to the MRTP Act (Monopolies and Restrictive Trade Practices Act) and the introduction of the Competition Act, 2002, were deemed constitutionally valid. The courts have consistently held that economic policies are within the purview of the legislature and executive, provided they do not violate fundamental rights or alter the basic structure.

Impact on Social and Economic Justice

Despite their constitutional validity, market reforms have arguably compromised the realization of social and economic justice, as enshrined in Part IV of the Constitution (DPSP). Several factors contribute to this:

• Increased Income Inequality: The reforms have led to a widening gap between the rich and the poor. While overall economic growth has been substantial, the benefits have not been evenly distributed. According to Oxfam India’s ‘State of Inequality in India’ report (2023), the top 10% of Indians own 77% of the country’s wealth.
• Agricultural Distress: The dismantling of agricultural subsidies and the opening up of the agricultural sector to global competition have negatively impacted small and marginal farmers. This has contributed to farmer distress, indebtedness, and an increase in farmer suicides.
• Decline in Social Sector Spending: Fiscal austerity measures, often associated with market reforms, have sometimes led to a reduction in public spending on essential social sectors like education and healthcare, hindering access for the marginalized.
• Informalization of Labour: The reforms have encouraged the growth of the informal sector, where workers lack job security, social protection, and fair wages.
• Regional Disparities: The benefits of economic growth have been concentrated in certain regions, exacerbating regional disparities. States with better infrastructure and skilled labor have attracted more investment, while others have lagged behind.

Counterarguments and Nuances

It is important to acknowledge that the relationship between market reforms and social justice is complex. Several counterarguments can be made:

• Poverty Reduction: Despite rising inequality, the percentage of people living below the poverty line has declined significantly since 1991. (According to the World Bank, poverty rate fell from 36% in 1993-94 to 10.2% in 2011-12). This suggests that economic growth, driven by reforms, has had a positive impact on poverty reduction.
• Increased Opportunities: The reforms have created new employment opportunities in the private sector, particularly in the services sector.
• Empowerment through Consumption: Increased income levels, even among the lower strata of society, have led to increased consumption and improved living standards.
• Government Initiatives: The government has implemented various schemes and programs to mitigate the negative consequences of reforms and promote social justice, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the National Food Security Act (NFSA).

However, these positive outcomes do not negate the fact that the benefits of growth have been unevenly distributed and that the reforms have exacerbated existing inequalities. The challenge lies in ensuring that economic growth is inclusive and that the benefits are shared by all sections of society.

Aspect	Impact of Market Reforms
Income Inequality	Widened gap between rich and poor
Agricultural Sector	Increased distress for small and marginal farmers
Social Sector Spending	Potential decline due to fiscal austerity
Labour Market	Growth of informal sector with limited worker protections