CHAPTER ——— EEE EE THREE POLITICAL INSTITUTIONS: LEGISLATURE, EXECUTIVE AND JUDICIARY = INTRODUCTION Various non-economic variables strongly influence the sphere of business activity. Political environment is one such important non-economic variable which influences, promotes, encourages, directs and controls the business activities in an economy. Political environment describes the political system prevailing in the country. The critical importance of the political environment to business is highlighted by the fact that it is often politics that determines economic and business policies. Various economic policies like industrial policy, foreign trade policy or even policy towards foreign capital technology are often political decisions. Such policies tend to have serious implications for the business activity in a country. The nature of a country’s political system including its governmental institutions decides, promotes and controls the business activity of that particular country. The principal pre-requisite for economic development for any country is definitely a political system which ensures personal security and safety to its citizens on all fronts. This is possible only if the prevalent political system dynamic and efficient besides being stable and honest. The political environment of business is a dynamic environment involving continuity and change. Further institutional arrangements of a country cause changes in the political environment. Political Environment has a fundamental impact on the operations of the corporate entity in a number of ways. Detailed understanding political systems, institutions and processes provide a greater insight into corporate decisions and into the complexities of the business environment. Business activity takes place both within and across state boundaries and frequently involvesThree Political Institutions: Legislature, Executive and 2, also be noted that corporate sector, but these companies can also help to gy," ence government decision makers, j* governments, whether directly or indirectly. It shoul only reactive to changes in the political environment, the political context in which they operate and can influ in a way which is beneficial to their own perceived needs. ™ TYPES OF POLITICAL SYSTEMS The following are the major types of political systems: 1. Authoritarian Political System: In an authoritarian political system the disposition is to settle conflicts through «, enforcement of rules, regulations and orders by an established authority. This author, may be an individual (eg. a monarch or other powerful individual) or a group ¢ individuals (eg. a political party or military junta) who may have assumed polity power in a variety of ways (eg. by birth, election or coup). The example may be of Nix (Germany), Stalin (Russia), Saddam Hussain (Iraq) ete 2, Democratic Political System: Under such a system, the wishes and views of individuals are said to be represented an established authority (e.g. a government) that has normally been chosen by thy people and which is accountable (responsible) to them at regular intervals through , variety of mechanisms, including regular and free elections. @ THREE INSTITUTIONS OF THE GOVERNMENT Normally the process of governing involves three major activities: decision making executing these decisions and adjudicating over them in case of dispute or non-compliancs ‘These three functions represent the three vital institutions of the government: legislature, executive and the judiciary. | (A) The Legislature:eMOocratic ris legislature representati i approach to "°c house and a lo, Process and hee Bislative chamby ‘consi malt e idea ion stage ers. ion an tnt 2 considers ae Functions of legislatures in Indi: It has been accepted that the ER HEMO tale ies elec eas a ene a Seer ese there unc taas tm ce ings pe ure ool ery a Jegislature unquestionably occupies the most important place a Sonus Sie te wer of the state. The legislature continues to be a significant organ of any aap a ane anes lepialatares are nok the same in every cout. eer of gerne x syabe determine their function. The nature end elect ct vole a legislature plays under @ i is dil arethat of a legislature in a democracy. The lepslaure Smarchy or aristocracy is different from fof a legislature in a democracy. : a> ey i ipa Parliamentary System of government Sn sch sytem he coor to the executive. The executive ronan! “sponsible and answers tthe i Ne eneever om the part ofthe execu SPE wy its actions. Continuing im Po tn ot cts legislature tonessme islature Arg support of the lest ree satisfaction 30s differ from country to country, th inst sure of inert of\ egislature, Executive ang litical Institutions: i rm Three Pi % 2. Regulatory Functions restate (6 2 4 “The executive is under responsible and answerable to the legislature for all its a. 1¢ legisl by a) asking questions to the ministers ,, : : 7 to legislature exercises its control by iB que < ee information relating to matters of administration and matters of i Pub importance. Secondly b) it, can move agonist a ce aes i" ost iy Hs ific lapses of the government and m« ’ ms a is pai nt nn aon amrent, which if passed by the legislature forces the party in power to ,.' “hese powers of the legislature regulate the working of the government to extent. 3, Financial Powers : | The legislature acts as the guardian of national purse. It regulates the “income .. expenditure of the government in respect of its various projets, administrative ia welfare. People's money must be controlled and spent under the supervision, control of their representatives to prevent its misuse and wasteful expenditure, theory no taxation without representation recognises the supremacy of the legisha. which is the fund raising and fund granting authority. No tax shall be collectay , expenditure be made without the approval of the legislature. All proposals for finan, legislation are routed through the popular chamber. 4, Deliberative Functions The Legislature is a deliberative body which facilitates determination of polices xg legislation through a process of debate and discussion. This discussion provides wis ‘opportunities to each member not only to present the view and perception of his pax but also permits to mould his own views in light of the discussion made in the Hoy Over and above the various viewpoints presented in the House contribute to ty growth of political consciousness of the people in general and educate the members executive to find out the solutions to various problems in particular. Through tis power the legislative acts as a link between the public and the government. 5. Judicial Function ‘The legislature also exercises some judicial function. In India the President, the judgs of Supreme Court, the members of U.PS.C, the Comptroller and Auditor General «n be impeached by the Parliament after fulfilling certain constitutional formalities. 6. Constitutional Functions The legislatures also have constitutional powers to amend the constitution, In India amendment proposals can be initiated only in the legislature. 7. Electoral Functions Many of the legislatures participate in electoral functions. The Indian Parliament te part in the election of the President and Vice-President of India. It also elects some ® members to various committees of the House. It elects its presiding and dep presiding officers.a spree Political Institutions: Legislature, Executive and Judiciary oS (p) THE EXECUTIVE ‘The Executive Ce Cir Executive Counel of Mining Rajya Sabha Max 250 Nico Lok Sabha Max 582 Nice Starts § 630 Nominated 12 $20UT $2 Angle (Normal) Functions of the Executive: In the modern state a variety of functions are performed by the executive, as stated below. 1. Administrative Function: The executive has a crucial role to play in various areas. The administration function of the executive includes the following. (a) Execution of Laws and Judicial Decision The executive is responsible to execute laws made by the legislature, and decisions of the Judiciary coming in the forms of judgements of courts, (b) Maintenance of Law and Order: The executive is responsible to maintain law and order. The police are mainly in change of this task. (©) Policy-Formation: ‘The executive is responsible for policy-making. It prepares the blue-print of the policy which goes to the legislature in the form of bill. The policy emerges after the bill is passed by the legislature and the head of state gives assent to it. 2. Diplomatic function: The executive plays a crucial role in the conduct of foreign relations. The executive appoints diplomatic representatives to foreign states and receives representatives from them. Treaties and international conventions are negotiated and concluded by the executive, often subject to the approval of one or both houses of the legislature.) ma Three Political Institutions: Legislature, Executive ang 3. Military Function: ‘The chief executive, in most of : i defen > forces, The ‘ower of waging war and concluding peace with any fori sexigned mes of emergency and grave national crisis yp is assigned to the executive. In time ng ve ee txecutive may declare martial law and suspend the rights of citizens. i the states, is made the supreme commande, 4, Financial and Economic Function (a) Budget-preparation: ‘The budget is prepared by the executive and presented to the legislaty, approval. (b) Revenue-collection: ‘The executive prepares the sources of revenue of the government, collects, and after the approval of the budget spends money on various heads, (o) Auditing: ‘The auditing and accounting of public expenditure are done under the super, of the executive. (a) Economic policy: ‘The executive plays a crucial role in the formulation of the economic policy of ‘country. This policy is designed to expedite economic development and make i, country self: reliant. The executive prepares plans relating to productg distribution and exchange of goods and resources. 5. Judicial Function: ‘The chief executive has the right of pardon or clemency. He may suspend, remit commute the sentence of a person convicted of an offence. This power is exercised ‘exceptional cases. 6. Constituent Function: The constitution may require certain changes. It executive which determines wht changes are necessary in the constitution, and such changes. It also takes the lead in piloting those constitutional amendments. 7. Legislative Function: The following are the legislative functions of the executive: (a) Law-Making: The executive prepares the legislative proposals, sends them in the form of bill the legislature, pilots and them on the floor of the legislature and works hard it the passing of bills by the legislature. A bill passed by the legislature, howe cannot be law unless it obtains the Assent of the head of state. He has the powe!! veto a bill or send it back to the legislature reconsideration.rr cq olicl Institutions: Legislature, Executive and Judiciary (b) To summon and provoke the House: The President in India has the power to summon and prorogue the legislature. Moreover, the President can dissolve the lower house of the legislature recommendation of the council of ministers. (o) Promulgation of Ordinance: When the national legislature is not in session head of state can promulgate ordinances to meet exigencies. The ordinance has force as law. It has to be placed before the legislature for approval when it meets passed by the legislature, it becomes a law. (d) Delegated Legislation: For lack of time and technical competence, the le delegates the power to make detailed laws and regulations to the executive. 3, Welfare Function: ‘As people have become increasingly conscious of the fact that the state has a responsibility to provide basic amenities of life to them, they are de the same and the governments, in general, are trying to meet their demand. It is the duty of the government to ensure that the people have food, clothes, shelter and access to education etc. The states are generally becoming ‘welfare states’. 9, Miscellaneous Functions : ‘The executive gives leadership to the government. It leads the legislature. It leads the party in power. It leads the nation in general, leadership to the state and represents it in various international conferences and organisations. Factors contributing to Growth in Executive Functions: In the recent past, there has been enormous growth in executive functions. The following are the factors which are responsible for this phenomenon: 1. Complexities and Technicalities of Modern Life: In course of time life has been burdened with many complexities and technicalities. In order to meet this challenge, the executive needs specialized knowledge and technical competence. This has led to increase in the function of the executive. 2. Welfare of People: In most of countries, there are large number of people afflicted by poverty and deprivation. They demand prompt attention of government which feels duty-bound to take welfare measures for them. 3. Overburdened Legislature: The complex problems of the modem state require more laws with great degree of complexities and technical nature. The modem legislature consisting of amateurs does not have the time and competence to deal with complex law making. Hence the executive has assumed more power. PE} “three Political Insitutions: Legislature, Executive and 3y, ry and investigation. Th ili y ts of ward, courts of enquiry and int The gran 7 considered to be most important organ of the following functions : s (a) Itinterprets and applies laws to specific cases. (b) Itactsas the guardian ofthe constitution in a federation. EET my f the government in democracy. [t Pens " (©) Itmakes law through adjudication (a) Itestablishes judicial precedent (e) Itis the guardian of the civil liberties of the people: () ()Itperiorms advisory duties and appoints its own staff. (@) It performs some miscellaneous functions like the granting of probate. appointment of receiver etc. Judicial Activism: : The term judicial activism refers to the review power vested with the system of judy courts and was first used in the United States of America. Judicial activism indicates the y pervading role of judiciary touching all the spheres of life of a common man, thereby protecting the fundamental rights of the citizens. Thus, it is a persistent sustained effort by the apex cous, make justice accessible for underprivileged and the deprived sections of the society. I promising step to ensure justice and also to repose the faith of public in the social and politi institutions. ™ FUNDAMENTAL RIGHTS The Constitution of India contains an exhaustive list of Fundamental Rights. They are above all other laws of the land. The Court ensures their observance by the State. ‘The Constitution has granted the following fundamental rights to the citizen’ 1. Right to Equality (Article 14): Article 14 of the Constitution guarantees equality ofa persons before law. Article 15 prohibits any discrimination between citizens on the basis of religion, race, caste, sex, or place of birth. It ensures equality of opportunity the matter of public employment, Article 14 prohibits hostile discrimination and nit reasonable classification for the purpose of legislation. 2. Right to Freedom (Article 19): Article 19(1) of the Constitution gives right to six freedoms (@) Freedom of speech and expression (&) Freedom to assemble peacefully and without arms (c) Freedom to form associations or unions (@) Freedom to move freely throughout the territory of India (€) Freedom to reside and settle in any part ofthe territory of India and eer Free Pate! Institutions: Legislature, Executive and Judiciary ( Freedom to practice any profession or to carry on any occupation, trade or business These freedoms are not absolute, they come along with certain limitations. The first Amendment Bill to the Constitution was passed by the Parliament on June 2, 1951. It | allowed the State to impose reasonable restrictions on the freedom of the individual in the interest of the security of the State, friendly relations with foreign states, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence. 3, Right to Life and Personal Property: Article 31, 3 1 A and 3 1 B guaranteed the right of the individuals and trusts to own and trusts to own, and administer their property. The Constitution says that no person shall be deprived of his property except by lawful authority. Right to property has been deleted by the 44th Amendment and now it has been made only a legal right. 4. Right to Freedom of Religion: Article 25 says that all the persons shall be entitled to freedom of conscience and the right to practice and propagate their religion freely. 5, Right to Cultural and Educational Freedom: The Constitution allows all the minorities in India to preserve and promote their languages, script and culture. The Constitution permits all the minorities (even if religious) to start and run their educational institutes and get financial aid without any discrimination from the State. 6. Right against Exploitation: Our Constitution recognizes the dignity of the individual and protects him against any form of exploitation either by the State or by the privileged classes in the society 7. Right to Constitutional Remedy: Article 32 confers on the people the right to move the Supreme Court in case of encroachment of the Fundamental Rights by the State. @ DIRECTIVE PRINCIPLES OF STATE POLICY: “Although the Directive Principles of State Policy confer no legal rights and create no legal remedies, they appear to be like an Instrument of Instructions, or general recommendations addressed to all authorities in the Union, reminding them of the basic principles of the new social and economic order which the Constitutions aims at building. These fundamental axioms of State Policy, though of no legal effect, have served as useful beacon-lights to courts.” (M.C. Setalvad) ‘The Directive Principles of State Policy are given in Part IV of the Constitution. Article 37 postulates that the Directive Principles, although not enforceable by the court, are nevertheless fundamental in the governance of the country and it shall be the duty of the state to apply these principles in making the law. The entire regulatory environment of the country is guided by one Principle, thatis, the Directive Principle em7 Executi\ ‘Three Political Institutions: Legislature, ive and Ju, ky ™ DISTINCTION BETWEEN FUNDAMENTAL RIGHTS AND DIRECTiIyp PRINCIPLES OF STATE POLICY = ghts and Directive Principles, to Parts Il and IV, that is, chapters on F Fundamental igh eee = Penis ey titute the “conscience” of the ian : the Fundamental Rights and Directive Principles of State policy have been discussed as under, 1. Meaning: Fundamental Rights are the other hand, the Dire organs of the state while performing the functions they ar. the rights guaranteed by the Constitution of the county, tive Principles of State Policy serve as guidelines fo, legally obliged todo. 2. Nature: Fundamental Rights constitute a set of negative injunctions. The state is restrained joy doing something’s. On the other hand, the Directive Principles of State Policy are a of positive directions. The state is urged to do something to transform India ing, social and economic democracy. Hence, Fundamental Rights are inward-looky, whereas the Directive Principles of State Policy are forward-looking. 3. Part: Fundamental Rights are given under Part III of the Constitution. On the other hand, ty Directive Principles of State Policy are given under Part IV of the Constitution, 4. Enforceable: Fundamental Rights are justiciable. They impose legal obligations on the state as wel as on individuals. Courts enforce them. On the other hand, the Directive Principles oj State Policy are non-justiciable. Courts do not enforce them. 5. Democracy: Fundamental Rights establish Political Democracy. On the other hand, the Directive Principles of State Policy establish Social and Economic Democracy. 6. Violation: Ifa law violates Fundamental Rights, the law in question will be declared void. On te other hand, no law will be declared unconstitutional on the ground that it violates Directive Principles of State Policy. 7. Constitutional Remedy: Against violation of a Fundamental Rights, constitutional remedy under Article 22 a available. On the other hand, no constitutional remedy is available against the violatin of a Directive Principles of State Policy. 8. Welfare: Fundamental Rights promote individual welfare. On the other hand, the Directive Principles of State Policy promote social welfare.od ical Institution: a pat Legislature, Executive and Judiciary ae 9, Preference: Whenever conflicts arise between Fundamental Rights and Directive Principles of State Policy, fundamental rights prevail over the directive principles because, in terms of larts, 32 and 226, fundamental rights are enforceable by the courts. So, the Directive principles of State Policy have to conform and are subsidiary to the chapter on Fundamental Rights. . FUNDAMENTAL DUTIES IN INDIAN CONSTITUTION jie, the Constitution of India did not contain any list of fundamental duties. The enatatin of the world’s first socialist country, that of Soviet Union contains a list of commen rights immediately followed by a lst of fundamental duties It is clearly asserted famine enjoyment of fundamental rights is conditional on the satisfactory performance of Feadamental duties. It was on this Soviet model that fundamental duties were added to the Fasan Constitution by 42nd amendment ofthe constitution in 1976. The fundamental duties are invined in Art. SIA, The fundamental duties constitute a constant reminder to the citizens that they have duties in building up a free, egalitarian, healthy and responsible society. The fandamental duties however are non-enforceable and non justifiable in character. This means that no eizen can be punished by a court for violation of a fundamental duty. In ths respect the fundamental duties are like the directive principles of the constitution in part IV. List of Fundamental Duties: Art. 51A, Part IVA of the Indian Constitution, specifies the list of fundamental duties of the citizens. Earl Itsays “it shall be the duty of every citizen of India: {) toabide by the constitution and respect its ideal and institutions; (i) to cherish and follow the noble ideals which inspired our national struggle for freedom; {ii) to uphold and protect the sovereignty, unity and integrity of India; (iv) to defend the country and render national service when called upon to do so; (v) to promote harmony and the spirit of common brotherhood amongst all the people of India transcending religious, linguistic and regional diversities, to renounce practices derogatory to the dignity of women; (vi) to value and preserve the rich heritage of our composite culture; (vii) to protect and improve the natural environment including forests, lakes, rivers, and wild-life and to have compassion for living creatures; (vii) to develop the scientific temper, humanism and the spirit of inquiry and reform; (ix) to safeguard public property and to abjure violence; (%) to strive towards excellence in all spheres of individual and collective activity, so that the nation constantly rises to higher levels of endeavour and achievement. (si) to provide opportunities for education by the parent or guardian, to his child, or as the case may be, a ward between the age of 6-14 years.‘ ‘Three Political Institutions: Legislature, Executive ny, @ RELATIONSHIP BETWEEN GOVERNMENT & BUSINESS ‘ness tends to vary in accordance with the h organisation involved. Moreover there is a two way relation between business and the . environment - changes in the political environment cause changes in the business acy," also business activity does influence government decision makers, often in a way yp, beneficial for them. ‘ The impact of political factors on a bus (a) Responsibilities of Business towards Government: ‘There does exist a close nexus between business and politics. Business firms need ‘0 oby government laws relating to their existence, functioning and operations. Other imp," responsibilities of business towards the government areas follows: i ; (i) Payment of taxes to the goverment: Taxes are a major source of public ry, envif essentially required for government expenditure. "E pusine (i) Providing relevant information to the decision makers individually or through yay, ee forums to influence decision making inthe ager interest ofthe business commun" Pede ai (ii). Voluntary cooperation with government agencies with regard to various program, | organs such as drought relief, tree plantation, sanitary works, and many other Wel programmes. internatio! (iv) Serving on various advisory boards constituted by the government. (©) Bidding for and executing government contracts to carry out projects suchas howiy En oil pipelines and many others, (ci) Corporate contributions to political parties SHORT (b) Responsibilities of Government towards Business: 4. "The: ‘The government plays a vital role in deciding, shaping, guiding and controlling busines 2, Judicis 3. Fundan activities. It promotes and regulates business activites and fulfils the following responsibil towards business 6) Making and enorcng laws relating to bushes! Ti goviemméat i respons framing rule and regulations for business systems to help them function smeothy 4. Discuss ti (ii) Maintaining order and protection of persons and property. : a (i) Providing inasracture altos such as power, fiance, transport a Hine com communication, civic amenities, etc, to facilitate smooth Functioning of business. 3 Explain in de (Gv) Promoting balanced regional development, equitable distribution of income sl 4, Discuss in de of State Poic ‘wealth and help in achievement of other macroeconomic objectives of full employ:mst and economic st ability. 5. Explain variou: (%) Publishing and providing important information of various goves cs ‘which is extensively used by business firms. asitical Institutions: Legislature, Executive and Judiciary sree Pal ry Supporting and assisting small sized business firms in areas of finance, (8 aeketing, and technical know-how. infrastructure, (vi Regulating the prices charged by business firms by competing with the business firms (vis) Regulating money and creditin the economy. (ia) Government tariffs and quotas to protect domestic business from foreign competition ‘There are a few among a wide range of functions performed by the government to encourage, regulate and develop business activities in an economy. . CONCLUDING REMARKS: To conclude, it may be remarked that the political environment of business is dynamic ceqvironment, containing, elements of both continuity and change. It has a colossal influence on pusiness as it deals with the regulations and legislations pertaining to business operations, government programmes, war, election and such like other problems. The changes in the tical environment also emanate from a country’s institutional arrangements depicted by the ‘titudes and behaviour of a country’s financial and other markets which is very critical for an organisation's future prospects. It must also be noted that political environment and political change is not restricted to national boundaries only, in fact our relationship with various international agencies like WTO, IMF, World Bank ete. is also affected by political change. EXAMINATION QUESTIONS § SHORT ANSWER TYPE QUESTIONS: 1, "The role of legislature on business is considerable”. Comment. 2. Judicial Activism. 3. Fundamental Duties. u LONG ANSWER TYPE QUESTIONS: 41, Discuss the business responsibilities to government and also government responsibilities to business. 2. What do you understand by political environment? Explain the three political institutions in our democratic set up. 3. Explain in detail the impact of legislature, executive and judiciary on business. 4. Discuss in detail the distinction between the Fundamental Rights and Directive Principles of State Policy. 5. Explain various fundamental rights contained in the constitution of India. ag0