Law

Supreme Court to Blame for Economic Slowdown: Lawyer Harish Salve

The 2G scam, coal block and Vodafone judgments scared foreign investors, Salve argued.

New Delhi: Renowned Supreme Court lawyer Harish Salve said in an interview to The Leaflet that he holds the Supreme Court squarely responsible for the economic slowdown in the country.

“…I squarely blame the Supreme Court.  I can understand holding people responsible for the wrong distribution of licenses in 2G… Blanket cancellation of licenses where foreigners are investing… see when a foreigner invested it was your rule which said he must have an Indian partner. The foreigner did not know how the Indian partner got a license. Foreigners invested billions of dollars, and with one stroke of the pen, the Supreme Court knocked all of them out. That’s when the decline of the economy began,” he told former solicitor-general Indira Jaising.

The lawyer was referring to how the court cancelled 122 licences given to eight companies in 2012, in the 2G allocation case, and struck down all but four of 218 coal block allocations in 2014, in the coal block case.

Also read: Why are Resident Indians Remitting More Money Abroad Than Ever Before?

After the Vodafone judgment, according to Salve, foreign investment in India became more risky. “So the Income-tax department is virtually setting the agenda for the Parliament. Now that on an international level, I now advise clients overseas, when they come and say, can you win the case? I say, yes I can win the case, and then what if there is a retrospective law, will it be valid? Of course, it won’t be valid. Then how can we invest? I say it’s a risk. So what happens immediately? And I’ll tell you why I’m saying this. We want a 25 percent return; then we will invest. We won’t invest otherwise…”

In addition to the apex court’s decision, Salve said that demonetisation is also partly responsible for the slowdown because it was badly implemented. “Even the best measures fail because of bad implementation,” he told Jaising.

Salve specialises in taxation and commercial law.

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