Socialism's Influence on the Indian Constitution

Article 39A requires equal justice and free legal aid, so that opportunities for securing justice are not denied by reason of economic or other disabilities.

Article 41 requires the State, within the limits of its economic capacity, to make effective provision for the right to work, to education and to public assistance in unemployment, old age, sickness and disablement.

Article 42 requires just and humane conditions of work and maternity relief; article 43 a living wage and conditions of work ensuring a decent standard of life; article 43A the participation of workers in the management of industries; and article 43B the promotion of co-operative societies.

The word in the Preamble

Inserted by the Constitution (Forty-second Amendment) Act 1976, which changed the description of India to a sovereign socialist secular democratic republic.

Three things a good answer says about that.

It was inserted during the Emergency, by an amendment much of which was later repealed, and its insertion is therefore politically as well as legally significant.

It was declaratory of what was already there. The Directive Principles had directed the State to socialist ends since 1950, so the word named an existing commitment rather than creating one.

It did not make socialism enforceable. The Preamble is not a source of power and confers no rights, and what the word does is supply a description of the polity that assists in construing everything else.

What the courts have done with it

Facts. Excel Wear v. Union of India, (1978) 4 SCC 224. Excel Wear was a partnership manufacturing garments for export and employing about four hundred workmen. Saying that relations had deteriorated and that it had become almost impossible to carry on the business, it applied under section 25-O(1) of the Industrial Disputes Act 1947 for previous approval of an intended closure, and the State Government refused approval on the ground that the closure was prejudicial to the public interest. The firm contended that the right to close a business is part of the right to carry it on under article 19(1)(g) and that the section was an unreasonable restriction.

Held. The Court struck down section 25-O as an unreasonable restriction. On socialism it held that the concept of socialism or a socialist state has undergone changes from time to time, from country to country and from thinker to thinker, though some basic concept still holds the field; and that so long as private ownership of an industry is recognised and governs an overwhelmingly large proportion of our economic structure, the principles of socialism and social justice cannot be pushed to such an extreme as to ignore completely, or to a very large extent, the interests of another section of the public, namely the private owners of the undertakings. It also noted that creditors, depositors and others dealing with an undertaking have rights affected by such legislation, and that the section did not require reasons to be stated in the order.

Facts. D. S. Nakara v. Union of India, (1983) 1 SCC 305. A memorandum of 25 May 1979 liberalised the formula for computing pension under the Central Civil Services (Pension) Rules 1972 and applied it only to those retiring on or after 31 March 1979, a second memorandum doing the same for the Armed Forces from 1 April 1979. Two petitioners who had retired in 1972 and a registered society of pensioners challenged the cut-off, contending that all pensioners under the rules form one class whatever the date of retirement and that the chosen date was arbitrary and violated article 14.

Held. The Court held the classification by date of retirement arbitrary and extended the liberalised formula to earlier retirees. It used the Preamble's word as an aid to construction, holding that the basic framework of socialism is to provide a decent standard of life to the working people and especially to provide security from cradle to grave; that article 41 enjoins the State to secure public assistance in old age, sickness and disablement; that every State action must be directed and so interpreted as to take society one step towards the goal of establishing a socialist welfare society; and that in examining the validity of legislative or administrative action the Directive Principles read in the light of the Preamble provide a reliable yardstick.

Read the two together and the position is clear. The word socialist is a real and operative direction: it decided Nakara, and it shapes how legislation and executive action are construed. It is not a rule that overrides fundamental rights or the interests of private owners: that is Excel Wear, and the Court's observation that socialism has no single settled content is the reason.

The other structural changes

Article 31C, inserted in 1971, protects laws giving effect to the directives in article 39(b) and (c) from challenge under articles 14 and 19. Its scope has been the subject of major litigation, and it is the clearest instance of the Constitution preferring the socialist directives to the liberal rights within a defined field.

Property. The fundamental right to property in articles 19(1)(f) and 31 was removed by the Constitution (Forty-fourth Amendment) Act 1978, and property became a constitutional right under article 300A, under which no person is to be deprived of property save by authority of law. This is the single largest structural change socialism produced in the Indian Constitution, and it is the classical to modern shift of chapter 580 made in the text.

A worked example

A State enacts a law requiring every company employing more than a thousand workers to allot ten per cent of its equity to a trust for the benefit of its employees, without payment.

The socialist justification. Article 39(b) and (c): the ownership and control of the material resources of the community should be distributed to subserve the common good, and the operation of the economic system should not result in the concentration of wealth and means of production to the common detriment. Article 43A: the participation of workers in management.

The Excel Wear objection. Private ownership of industry is recognised and governs an overwhelmingly large part of the economy, so the principles of socialism cannot be pushed so far as to ignore the interests of the owners. Existing shareholders, and the creditors and others who dealt with the company on the basis of its capital structure, have interests the law affects.

How the question would actually be decided. Not by the word in the Preamble but by whether the law is within the legislature's competence, whether the deprivation of property is by authority of law under article 300A, whether the restriction on the right to carry on business is reasonable under article 19(6), and whether article 31C protects it as a law giving effect to article 39(b) or (c).

Notice what the analysis shows: the socialist commitment supplies the purpose and the liberal structure supplies the test. That is the Indian arrangement in one sentence, and it is the sentence to end an answer with.

Distinctions that carry marks

What this topic is NOT

It is not the claim that India adopted socialism. The Constituent Assembly declined to fix the economic structure, and the Constitution permits a wide range of economic arrangements.

The Preamble is not a source of power. It confers no rights and no legislative competence, and it assists in construction.

The word socialist did not create the commitment. The Directive Principles carried it from 1950; the 1976 amendment named it.

Directive Principles are not unenforceable in the sense of being irrelevant. Article 37 declares them fundamental in the governance of the country and a duty of the State to apply in making laws, and Nakara shows a case decided with their assistance.

Quick revision

1. Before the Constitution: the Congress's Karachi resolution of 1931 on fundamental rights and economic policy is the ancestor of Part IV. The Constituent Assembly declined to put socialist in the Preamble.
2. Part IV carries the content: article 38 on minimising inequalities of income, status, facilities and opportunities; article 39(b) distribution of material resources to subserve the common good; article 39(c) no concentration of wealth and means of production to the common detriment; 39A legal aid; 41 work, education and public assistance; 42 humane conditions and maternity relief; 43 a living wage; 43A workers in management; 43B co-operative societies.
3. The word socialist was inserted by the Forty-second Amendment 1976, during the Emergency; it was declaratory and it is not enforceable by itself.
4. Excel Wear: socialism has changed from time to time, from country to country and from thinker to thinker, and cannot be pushed so far as to ignore the interests of private owners while private ownership governs the economy.
5. Nakara: the basic framework of socialism is a decent standard of life and security from cradle to grave; every State action must be interpreted so as to take society a step towards a socialist welfare society; the Directive Principles with the Preamble are a reliable yardstick.
6. Structural changes: article 31C protects laws giving effect to article 39(b) and (c); and property was removed from Part III by the Forty-fourth Amendment 1978 and became article 300A.
7. The sentence to end with: the socialist commitment supplies the purpose and the liberal structure supplies the test.

Test yourself

1. How did socialism enter the Indian Constitution? Through the Directive Principles, which were socialist in substance from 1950 and which descend from the Congress's Karachi resolution of 1931 on fundamental rights and economic policy. The Constituent Assembly declined a proposal to describe India as socialist in the Preamble, on the view that the economic structure should be left to the people to decide from time to time. The word was inserted only in 1976, by the Forty-second Amendment, during the Emergency, and it named a commitment that Part IV already carried rather than creating one.

2. Which provisions carry the socialist content, and what do they require? Article 38 requires a social order informed by social, economic and political justice, and the minimising of inequalities in income and the elimination of inequalities in status, facilities and opportunities among individuals and groups. Article 39 requires an adequate means of livelihood, the distribution of the ownership and control of material resources to subserve the common good, the prevention of concentration of wealth and means of production to the common detriment, equal pay for equal work, and protection of the health and strength of workers. Articles 39A, 41, 42, 43, 43A and 43B add legal aid, public assistance in unemployment, old age and sickness, humane conditions of work and maternity relief, a living wage, workers' participation in management, and the promotion of co-operative societies.

3. What did Excel Wear hold about the word socialist? That the concept of socialism or a socialist state has undergone changes from time to time, from country to country and from thinker to thinker, though some basic concept still holds the field; and that so long as private ownership of industry is recognised and governs an overwhelmingly large proportion of the economic structure, the principles of socialism and social justice cannot be pushed to such an extreme as to ignore completely or largely the interests of another section of the public, namely private owners. Section 25-O of the Industrial Disputes Act was accordingly struck down as an unreasonable restriction on the right to carry on business.

4. What did Nakara do with the same word? It used it to decide the case. Holding a classification of pensioners by date of retirement arbitrary and extending the liberalised pension formula to earlier retirees, the Court reasoned that the basic framework of socialism is to provide a decent standard of life to working people and especially security from cradle to grave, that article 41 enjoins public assistance in old age, sickness and disablement, that every State action must be directed and interpreted so as to take society one step towards a socialist welfare society, and that the Directive Principles read with the Preamble supply a reliable yardstick for testing legislative and administrative action.

5. State the Indian position on socialism in one sentence, and justify it. That the socialist commitment supplies the purpose and the liberal structure supplies the test. Excel Wear shows that the word cannot override the rights and interests of private owners while private ownership governs the economy, and that it has no single settled content; Nakara shows that it is nevertheless a genuine interpretive direction capable of deciding how a benefit must be distributed. Article 31C and the removal of property from Part III show the Constitution preferring the socialist directives to the liberal rights within defined fields, and article 300A and the requirement of reasonableness show the liberal structure continuing to supply the standard by which any such preference is tested.