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Judiciary More IndependentMaking Judiciary More IndependentMaking Judiciary More
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Judiciary More IndependentMaking Judiciary More IndependentMaking Judiciary More
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Judiciary More IndependentMaking Judiciary More IndependentMaking Judiciary More
IndependentMaking Judiciary More IndependentMaking Judiciary More IndependentMaking
Judiciary More IndependentMaking Judiciary More IndependentMaking Judiciary More
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Judiciary More IndependentMaking Judiciary More IndependentMaking Judiciary More
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IndependentMaking Judiciary More Independentv
n of fundamental rights:
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In modern times, many countries grant fundamental rights to the people in the
Constitution. The Supreme Courts there act as the custodian of these rights. In the
Constitution of our country, citizen violates these fundamental rights or if,
because of this violation, a person loses his rights, an appeal can be filed in a
High Court or the Supreme Court for the protection of these rights. It is the duty
of the courts to protect the rights of the citizens. Our High Courts and Supreme
Court have decided many cases in which the question of the violation of the
fundamental rights was involved.
(5) Guardian of the Constitution:
Chief Justice Marshall of U.S.A. definitely decided in Marbury v. Madison (1803)
that the courts had the inherent right to declare the acts of Congress invalid.
Since then Marbury case forms the basis of this important authority exercised by
the Supreme Court.
If a law passed by the Congress violates the Constitution, that law shall be
declared as void because the Constitution is the highest law of the land and it is
the duty of the courts to protect it. The principle which was devised by Chief
Justice Marshall is known as Judicial Review. For the protection of the
Constitution many laws have been declared illegal which violated any law or any
clause of the Constitution.
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(6) Decides the conflicts of jurisdiction between the Centre and State Governments
in Federations:
In federal constitutions there is a division of powers between the Centre and the
States. There is a possibility of disputes arising between the Centre and the State
over the jurisdiction. Therefore, the Supreme Court is given the right to decide
these disputes.
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(7) Advisory:
In India, the Supreme Court has been given, the right in the Constitution to render
advice on Legal Matters when asked for by the President. Our late President Dr.
Rajendra Prasad sought advice of the Supreme Court on the Kerala Education Bill.
The Supreme Court advised that the Bill contained certain clauses which violated
the Constitution.
Dr. Rajendra Prasad refused to give his assent to the Bill and returned it with his
objections. Later, the Kerala Legislative Assembly removed all the objections and
the President gave his assent. The Supreme Court recently (on 24 October 1994) for
the first time rejected the Presidential reference.
(8) Miscellaneous functions:
The Court appoints Trustees or guardians of the property of minors. It gives
approval of Civil Marriages. It appoints receivers of the companies which are
Unable to meet their financial obligations. It also performs the act of the
registration of Wills. It issues certificates for the grant of naturalised
citizenship. In some countries it issues licenses. In our country, appeals relating
the elections are also sent to High Courts.

THE PTI government marked its first anniversary on Aug 18. The past year has
witnessed an incessant as well as intense debate on the performance or non-
performance of the new government with regards to the economy.
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Therefore, today efforts are made to free the judiciary from the control of the
executive, so that the judges may give decisions fearlessly. In India, during the
British rule, the Deputy Commissioner or the Collector had both executive as well
judicial powers.
Consequently, he had sometimes to give wrong decision under the influence of high
officials and ministers. In the new Constitution of India under the Directive
Principles of State Policy, clear directions have been given to the government that
it should make efforts to separate judiciary from executive.
Now in most of the states of India, the judiciary has been made free from the
control of the executive, at the district level, and judicial powers have been
taken away from the hands of the Deputy Commissioner. These judicial powers have
been given to the Additional District Magistrate. There is no control of executive
over the High Court and the Supreme Court. Therefore, the judiciary enjoys complete
independence in India.
7. No practice after retirement:
The judge should not be allowed to do legal practice after retirement, because his
previous colleagues would favour him in the cases in which he appears as a lawyer.
In Article 220 of the Indian Constitution it is mentioned that no person who after
the commencement of this Constitution has held office as a permanent Judge of a
High Court shall plead or act in any court or before any authority in India except
the Supreme Court and the High Courts.

Unfortunately, much of this discussion has been grounded neither in fact nor in
economic precepts, and has thus not only been very non-illuminating � generating
more heat than light � but has also caused confusion and deepened the prevailing
uncertainty.

For some among the �commentariat� engaged in this shrill national debate, this is
partly deliberate and agenda-driven, deflecting criticism from PML-N�s poor
management of the economy or scoring political points. For many others, the
arguments are either misinformed, lacking context or downright alarmist. The
�punditocracy� is most off the mark in assessing or discussing critical parameters
of the economic situation: the fall in the rupee, the knock-on impact on the stock
market as well as on growth and inflation, and the sharp increase in the country�s
debt stock. We will examine the first three of these.

�Devaluation�: The exchange rate is a �price� determined, like in any other non-
restricted market, by the interaction of supply and demand. Viewed from this
perspective, examining the demand and supply of dollars will put the movement of
the rupee over the last year in context.

Conventional wisdom on the economy is wide off the mark.

In July 2018, at the beginning of fiscal year 2018-19, the situation with regards
to the country�s external payments for the year ahead (the demand for dollars) was
as follows:

Read: PM forms body to control rupee devaluation

The gross external financing requirement was around $27 billion. Predetermined
short-term outflows (foreign exchange swaps, central bank liabilities) not included
in the above total amounted to a further $7bn. Hence, the total demand for dollars
for 2018-19 was circa $34bn. (It is important to realise this estimation of demand
did not include the need to build foreign exchange reserves by at least a further
$6bn to $8bn at the time.)

On the supply side, the foreign exchange reserves held by the SBP on July 1, 2018,
amounted to $9.8bn. During the course of the year, this would likely be augmented
by foreign exchange inflows from FDI and external loans, but the timing as well as
magnitude of these remained highly uncertain without the IMF. Hence, as things
stood for all practical purposes, there was an excess demand of over $24bn in the
country�s exchange market.

Given the unprecedented size of the gap between the supply and demand of dollars,
there should be no mystery why the rupee crashed when the SBP withdrew its support
(because its foreign exchange reserves were depleting untenably). This is a repeat,
albeit on a much smaller scale, of what happened in Thailand and Indonesia during
the East Asian crisis in 1997. And yet senior commentators, including eminent
economists, practitioners, and opinion influencers, have continued to rail against
the government�s decision to �devalue� the rupee, as if there was a choice.

A final point on the rupee to address the deliberate confusion being spread by
those elements wishing to deflect criticism from the atrocious economic management
of the PML-N, which was directly responsible for this crisis. The country�s foreign
exchange reserves had already fallen from $16.1bn to $9.8bn in 2017-18 � before the
PTI government took over. In fact, in July 2018, one month before the formation of
the PTI government, there was a near-consensus in the financial markets that the
rupee would fall to at least Rs180 to Rs200 per dollar. This is as clear an
indication as any that the mess had already been created before the PTI government
took over.

While policy missteps by the government have compounded the situation in many ways,
the sharp adjustment of the exchange rate is at the root cause of the evaporation
of confidence, the spike in inflation as well as policy interest rates, and the
consequent slowdown in the economy.

Growth: Another pervasive criticism of the government is that economic growth has
stalled. With the country undergoing its severest economic crisis on record, this
expectation is completely misplaced when viewed in the context of multiple crisis
episodes, whether across a range of countries or Pakistan�s own experience.

As I wrote in a previous column in Dawn, �Anatomy of a crisis� (July 19):

�Declining confidence of economic agents, sharply curtailed access to credit, a
steep contraction of purchasing power induced by the falling value of the currency
and the associated inflation, are amplified by the defensive policy measures that
authorities need to take (higher interest rates, taxation measures, expenditure
reduction). The result is that the contagion effects are soon transmitted from the
financial markets to the real sector. Large output losses are experienced, with
resulting unemployment.

To put this in perspective, Greece�s economy shrank over 29 per cent between 2008
and 2016, while Ireland faced an economic contraction of almost 10pc in 2008-09 in
the aftermath of the global financial crisis. Spain�s economy shrunk by over 9pc
between 2009-13. Pakistan�s own experience of the 2008 crisis is of economic growth
slowing down sharply to only 0.4pc in 2009, with large-scale manufacturing
contracting 4.2pc.�

Stock market: A similar disconnect appears between the experience of multiple

countries facing economic crises, and the expectation of local market participants,
that somehow the stock market should defy a historical pattern. Facing large
currency devaluations, Indonesia�s JCI index plummeted more than 50pc in 1997,
while Argentina�s stock market has fallen 31pc since January 2018, just to
highlight two examples.

None of this is intended to suggest that the government has handled the situation
without reproach, or that there is little it can do other than to �wait it out�.
The economic team has done poorly on some fronts, and is choosing not to rectify
some egregious policy missteps. However, much of the criticism the government has
faced in the past year with regards to the economy is misplaced and not based on
facts, or is out of context.