Times of Better Bharat

What the problem actually is

Ask an Indian business owner to name their worst structural constraint and you will rarely hear 'tax rates' or 'tariffs'. You will hear some version of: if a counterparty refuses to pay, there is no realistic way to make them.

This is not a complaint about bad law. India's contract law is serviceable and its commercial statutes are broadly modern. The problem is the interval between filing and resolution. When that interval runs to years, the legal right becomes theoretical, and a right that cannot be exercised within the lifetime of a working-capital cycle is not functioning as a right at all.

The consequence is not that firms lose cases. It is that they never file. The dispute is absorbed, the relationship ends, and the loss is written off as a cost of doing business.

Why it shrinks firms

A business that cannot enforce a contract against a stranger will only trade with people it already trusts. That is a rational response, and it has a specific structural consequence: the firm's possible set of customers and suppliers is bounded by its personal network rather than by the market.

This is one reason Indian enterprise clusters into family and community networks, and one reason so many firms stay small. Scale requires transacting with people you do not know. Transacting with people you do not know requires a credible enforcement backstop. Where the backstop is slow enough, informal trust substitutes for it — and informal trust does not scale past a few hundred relationships.

The visible symptom is the MSME payment-delay problem: large buyers pay small suppliers late because the supplier's only remedy is a process slower than their own insolvency. The invisible symptom is every transaction that never happened.

What would actually move it

Most proposals address the wrong variable. Adding judges helps at the margin, but pendency is not purely a headcount problem — it is a throughput problem, and throughput is governed by adjournment practice, service of process, and the absence of consequences for procedural delay by the party that benefits from it.

The interventions with the best evidence behind them are unglamorous: enforceable limits on adjournments, electronic service of summons, and commercial benches with case-management timetables that bind. Each removes a specific mechanism by which the party in the wrong extracts value from delay.

The measurement problem is separate and worth naming. India does not publish clean, comparable, national data on commercial dispute resolution time. The Doing Business indicator that used to proxy it was withdrawn, and nothing has replaced it. A problem this consequential is currently being managed without a reliable national number — which is itself part of why it persists.

How to read this

This is an argument, not a measurement. The charts above are sourced and checkable; the reasoning between them is editorial judgement and should be treated as such. Where a claim has no series behind it, it is stated as judgement rather than fact.