Delegated Legislation - IE - 12/01/23

Context:
In the Supreme Court judgement on the Central Government’s decision of demonetisation, the majority ruling upheld the validity of the delegated legislation while the dissenting verdict noted that excessive delegation of power is arbitrary.
Relevance:
GS2
About:
->Delegated Legislation: Since the Parliament cannot deal with every aspect of the governance system by themselves, they delegate these functions to the authorities established by law. This delegation is noted in statutes, commonly called delegated legislations.

->SC’s View on Delegated Legislation:
-The SC in Hamdard Dawakhana v Union of India (1959) case struck down delegation of powers on the grounds that it was vague.
-The Supreme Court in a 1973 ruling held that the concept of delegated legislation has evolved out of practical necessity and pragmatic needs of a modern welfare State.

->Delegated Legislation in Demonetisation Case:
As per the RBI Act, 1934 (Section 26(2)) the Central govt. is empowered to notify ceasing a particular denomination of currency as legal tender.
This delegation of power to the Centre was challenged on the basis that Section 26(2) contains no policy guidelines on how the Centre can exercise its powers, thus it is arbitrary (and unconstitutional).

->Significance:
-It allows flexibility and adaptability in the law-making process. By delegating certain powers, the legislature can respond more quickly and efficiently to changing circumstances and emerging issues.
-Delegated authorities with extra skills, experience, and knowledge (in fields like technology, environment etc. where the Parliament may not always have an expertise) are more suitable for making law.

->Criticism:
-It can lead to a lack of accountability/transparency in the law-making process as laws made by executive agencies/administrative bodies are not subjected to the same level of public scrutiny and debate as laws made by legislature.
-Additionally, it can also lead to a concentration of power in the executive and administrative branches of government, which may undermine the principle of separation of powers.

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