What is the single major impediment to the smooth progress of the economic reforms? The easy answer to that is vested political and economic interests that have short-term gains in view and are hence uncomfortable with any change that would usher in more competition and force businesses to be more efficient. But look beyond these obvious hurdles and it is the Indian judicial system that might well appear as the stumbling block to the reforms.

Recently, even retired Chief Justice A.M. Ahmadi admitted that the Indian judiciary is largely to be blamed for the delays in project clearance. He cited the example of Cogentrix where the project was delayed by nearly a year because of judicial delays.

The crux of the problem is that while India's economic policy-making is in line with the new liberalised global economy, the judicial system is out of sync with it. Our legal system should necessarily work in harmony with the global legal environment and not be in a time warp that harks back to the past. Besides the fact that many of our laws are archaic and hence dysfunctional in today's world, a lot of them work at cross-purposes and create unnecessary confusion for both the domestic and foreign investor or entrepreneur. And, in areas where technology has taken a quantum leap-like in automobiles, ATMs, e-commerce, stock depositories, and environmental issues-the judicial system has not been able to keep pace, thereby leaving the field open for possible conflict and, consequently, litigation.

Also contributing in no mean terms is the inordinately long time that is taken for cases to be decided. The average waiting time for a case to be settled in India is twenty years! Long waiting periods add to costs of transactions and have a telling effect on a project's bottomline, sometimes even before it can go on stream. Many companies, like the now bankrupt Enron, prefer to opt for arbitration in the US or the UK rather than in India.

The plethora of overlapping statutes create more problems than they resolve. For example, there are 51 different Central Acts on labour legislation alone and, to add to the confusion, they have different definitions for 'child wages', 'bonus', and 'workman'. While Section 21 (k) of the Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act of 1981 states that house rent allowances (HRA) and dearness allowance (DA) should not be included in wages, Section 2(RR) of the Industrial Disputes Act of 1947 states that they are included in wages.

There are other anomalies galore-some even with a twist of black humour. The Transfer of Property Act of 1862, for instance, allows foreclosure without going through the court under three conditions: Section 69 of the Act allows the mortgagee to foreclose where ''neither the mortgagor, nor the mortgagee is a Hindu, Mohammedan, or Buddhist.'' No wonder, the clause just does not work.

Still, things seem to be slowly changing for the better. The Supreme Court's landmark judgement in upholding the decision of the government to disinvest in Balco at the reserve price decided, has made the intention of the apex court crystal clear: it is not the function of the Supreme Court to sit in judgement over the economic policies of the government. Thus, the practice of challenging every government policy on one issue or the other through public interest litigation will now, hopefully, become a thing of the past.

Yet while the Supreme Court's recent proactive steps to help the reforms process is commendable, a lot more needs to be done. Like breaking free arbitration in economic matters from the apron strings of the courts. For that is the only way arbitration procedures can be successful.

Clearly, only by making reforms in the legal system can we hope to make the road to economic reforms smoother.