Rule of law is better than the rule of life, but it is a two-way street

Rule of law doesn’t just apply to citizens and businesses, it applies to government too

There has been a welcome development in India that many are talking about the need for a rule of law based system rather than the rule of life, an apt phrase which I heard here. In, what is termed as “rule of life”, the government accepts how people live and conduct their business even when they are in violation of basic laws, instead of enforcing the law. The government, being a political entity, does this because it is afraid of popular backlash. Not paying service tax by paying in cash, not following building by-laws, are good examples, where the rule of life prevails over the rule of law.

The supporters of the idea of changing India from the rule of life to the rule of law (often packaged along with the political message), enumerate the examples of GST, RERA, Bankruptcy code and even demonetisation (as I mentioned, it tends to be political too). An example. Will come back to it demonetisation later, but I do not have much disagreement that GST, RERA, Bankruptcy code are good things. We need more such laws and implement them well too. This is a positive development and people behind it should get credit.

But this is only half of the story, as far as, fair implementation of the idea rule of law goes. The rule of law also applies to the government.

We need to hold our governments accountable when they expect us to follow the rule of law. This can be a virtuous cycle. But even the supporters of rule of law (which are few) are not doing that. And those trying to hold government accountable are not doing it because they particularly want a rule of law based system, for them, the old system is good enough. Let's see some examples:
- Rule of law implies that the government will not interfere with national statistics like GDP, Labour data, and other such important public data.
- Rule of law implies that if citizens/businesses are supposed to file their taxes honestly and on time, the government will also pay back any excess amount charged because of input credits, extra-income tax deducted at source on time. There are companies which have not received this for more than a year now.
- Similarly, the government will not create artificial disinvestment numbers, by moving money from one public sector to another.
- The government will maintain public finance in a fair and transparent manner and not try to hide deficits using creative accounting.

These are just some examples. Lastly the demonetisation episode, in fact, is an ironic example of a violation of the rule of law — even if we allow that the intention was to, install the rule of law. Amit Varma has the best argument for why it was an assault on private property — the core attribute of the rule of law based society.

Rule of law must be reciprocal or else the rule of life will prevail over it sooner or later. Non-reciprocal, one sided, rule of law will lose its legitimacy eventually.