A LEGAL INQUIRY INTO ARTICLE 39(b) & 39(c) OF THE INDIAN CONSTITUTION AND WEALTH REDISTRIBUTION IN INDIA

Authored By – Shivansh Singh, Integrated Law Course (ILC), Faculty of Law, University of Delhi

A) INTRODUCTION

Income and wealth inequality in India is worse than it was under colonial rule. The Gini coefficient for India, which is used to evaluate wealth and income inequality, fell from 0.4297 in 2017-18 to 0.4197 in 2022-23, highlighting the persistent divide between the rich and the poor in our society. India’s socio-economic composition is garnering an infamous reputation for hosting a steep and wide divide between these economic classes, where the top earners of the country have accumulated most of the political and economic power. This calls for an introspection of the approaches to policy formulation adopted by the economic framework of the country and the ultimate goal it seeks to achieve.

India, as a welfare state, has made efforts to address social injustices through wealth redistribution via various welfare policies such as the Pradhan Mantri Awas Yojana and other forms of affirmative action. Moreover, the Constitution of India strives to ensure economic justice, as enshrined in Article 39(b). Recently, the debate on inheritance tax has also sparked discussions in India regarding how redistribution should take place.

While the ongoing case in the Hon’ble Supreme Court against the 1986 amendment to the Maharashtra Housing and Area Development Act, 1976 (MHADA), deliberates on the constitutional extent of material resources under Article 39(b) and (c) of the Indian Constitution (hereinafter “Art. 39”), it is crucial to understand the genesis and sociological intent behind this provision and what it seeks to achieve. Furthermore, in light of the observations made by the Chief Justice of India, D.Y. Chandrachud, in the same case—limiting the interpretation of Art. 39 to exclude the protection of private property—this paper seeks to evaluate the legal and sociological basis and statutory backing of this provision to understand the holistic approach of the law.

Keywords: Economic Inequality, Wealth Redistribution, Article 39, Socio-Economic Justice, Constitutional Law

B) THE IMPERATIVES OF ARTICLE 39 OF THE INDIAN CONSTITUTION

Article 39(b) of the Indian Constitution provides for the distribution of ownership and control of material resources in a manner that serves the common good. Subsequently, Article 39(c) lays down that the operation of the economic system should avert the concentration of wealth and means of production to the detriment of the public. Although Art. 39 falls under the Directive Principles of State Policy (DPSP) in Part IV of the Indian Constitution, it outlines the socio-democratic ethos of our polity, providing guiding principles for all socio-economic enterprises that the country ought to pursue.

These principles, with socialist undertones, establish a directive for maintaining the ethical integrity of the economic system. The overarching idea of Art. 39(b) and (c) addresses the primary criticism against capitalism: that it exacerbates the rich-poor divide. Critics argue that capitalism acts as an incubator for wealth inequality. However, proponents of capitalism, often self-proclaimed “rationalists,” defend the system on two key grounds:

  1. Economic rewards should be merit-based.
  2. The trickle-down effect ensures that wealth accumulation benefits the less privileged in the long run.

However, a closer examination of these justifications reveals logical flaws, and an in-depth study exposes the principal failings of these arguments.

C) THE INHERENT CONTRADICTIONS OF UNRESTRAINED CAPITALISM

The trickle-down economic model implies a linear and vertical flow of economic benefits from the rich to the poor within society through natural economic transactions. This effect occurs when the wealthy accumulate money, increasing their purchasing power, which in turn raises demand for goods. This increased demand leads to higher production, thereby creating employment opportunities and improving the socio-economic conditions of the poor.

This model is often used to justify tax exemptions for the wealthy. However, in reality, it primarily benefits the rich while failing to deliver substantial advantages to the poor. The continued accumulation of wealth by the elite, coupled with lower taxes, results in negligible trickle-down effects. Empirical studies indicate that such tax cuts do not stimulate economic growth or employment significantly. Additionally, the trickle-down mechanism does not effectively distribute resources.

A redistributive economic model, in contrast, provides a more robust framework by fostering production efficiency. In such a model, the poor borrow less to invest in production, thereby increasing equal opportunities. In contemporary India, where society is already fragmented along caste, religious, and gender lines, the increasing private concentration of wealth is giving rise to new social classes based on accumulated wealth.

Wealth distribution patterns in India reflect this deepening divide: the top 10% of the population holds 77% of the national wealth. This glaring inequality necessitates revisiting Articles 39(b) and (c) to analyze the principles enshrined in the Constitution for guiding future economic policies.

D) IMPLICATIONS OF ARTICLES 39(B) AND 39(C)

To grasp the potential benefits of Articles 39(b) and (c), these provisions must be interpreted with a spirited and holistic approach.

The key components of Art. 39(b) and (c) are:

  • The distribution of ownership and control of material resources.
  • The prevention of the concentration of wealth and means of production.

These articles aim to ensure that material resources are distributed in a manner that serves the common good and prevents economic systems from favoring a wealthy minority at the cost of the larger public.

The Constitution does not explicitly define “material resources” or “means of production.” However, discussions during the Constituent Assembly debates provide insights into the intended scope of these provisions. The amendment proposed by Prof. K.T. Shah sought to define material resources as the natural resources of the country, to be controlled and utilized by the community as a whole. The common consensus was to prevent private monopolies from controlling these resources, as private ownership would prioritize profit over social welfare.

Throughout these debates, it was consistently emphasized that the ownership, control, and management of material resources should be vested in the community collectively, represented by the Central or State Governments or statutory corporations. In summation, Art. 39(b) vests the true control over these resources in the citizens of the country.

E) THE IMPLICATIONS OF PROPERTY OWNERSHIP AND RESOURCE CONTROL

The importance of controlling material resources stems from their consequences, particularly in two key areas:

  1. Inequality
  2. Economic Performance

Access to property and material resources determines the degree of social stratification. Pierre Bourdieu’s writings highlight the relationship between property ownership and class status. The right to property, coupled with intergenerational inheritance, exacerbates wealth inequality, solidifying rigid social classes more significantly than income disparities do.

Unequal resource distribution further perpetuates disparities in education, healthcare, and social mobility. Wealthier social groups, with more disposable income, invest in better healthcare and education, improving their overall quality of life. In contrast, resource-deficient groups remain disadvantaged across generations.

Statistical evidence supports this claim:

  • In states with high income inequality, a larger proportion of the population suffers from poor health.
  • Individuals from poorer households are more prone to short-term health issues such as fever, diarrhea, and respiratory infections.
  • Between 1993–94 and 2004–05, enrolment rates for the poorest groups decreased, whereas the wealthiest groups saw significant increases.

Additionally, ownership of material resources translates into political influence, shaping policy decisions that further entrench economic disparities. The propertied class, by virtue of its wealth-induced access to education and political power, influences policymaking in its favor, advocating for tax exemptions and economic privileges. This cycle perpetuates socio-economic stratification.

At a global level, this pattern is reflected in geopolitical dynamics, where developed nations such as the United States and European countries, possessing the majority of the world’s intellectual property, push for stricter intellectual property rights to maintain their dominance.

Thus, the sociological implications of wealth distribution and material resource control are far-reaching. A serious introspection of wealth inequality in light of Art. 39 is necessary to ensure a more equitable society.

F) JUDICIAL INTERPRETATION OF ARTICLES 39(B) AND 39(C)

The Hon’ble Supreme Court, in the case of Kesavananda Bharati Sripadagalvaru vs. State of Kerala, extensively propounded upon the nature of Article 39(b) and Article 39(c), providing much-needed clarity on the subject. The Court held that the wording of these articles is very broad, reflecting the wide-reaching ambit of the underlying provisions and ensuring they are not restricted to the subjective limits of their contemporaneous times, thereby providing a much broader scope for their application.

The Court further observed that these provisions, together with other provisions of the Constitution, contain one of its main objectives—building a welfare state and an egalitarian social order. However, while expanding upon the subject of defining the limits of sub-clauses (b) and (c) of Article 39, the Supreme Court noted that laws enacted under these provisions would operate on “material resources,” concentration of wealth, and “means of production.” This implies that legislative efforts would typically involve nationalizing material resources of the community and imposing controls on production, supply, and distribution of key industries and essential commodities. This interpretation, however, may impinge upon a specific economic system, contrary to the intentions of the Constituent Assembly, which had deliberately provided a broad scope to these clauses.

Therefore, clauses (b) and (c) of Article 39 do not prescribe any particular subject matter for legislation. Instead, they lay down certain objectives to be achieved, with numerous possible methods for their realization. These clauses encompass a vast field of social and economic activities of both the Union and State governments.

  • Clause (b) of Article 39 states that the State shall direct its policy towards ensuring that the ownership and control of the material resources of the community are distributed in a manner that best serves the common good.
  • Clause (c) of Article 39 directs the State to prevent the operation of the economic system from resulting in the concentration of wealth and means of production to the common detriment.

These two provisions articulate a specific political philosophy that, in conjunction with other constitutional provisions, guides the State in adopting a welfarist approach to protect and uplift its citizens.

G) DIFFERENT THINKERS ON WEALTH REDISTRIBUTION AND COMMON OWNERSHIP OF RESOURCES

1. Ram Manohar Lohia’s New Socialism

Ram Manohar Lohia’s conception of socialism was distinct in its approach, offering an India-specific outlook. The key tenets of his socialism emphasized equality and affluence for the people, treating socialism as a way of life aimed at emancipating individuals from backwardness, ignorance, prejudice, and superstitions. His vision of small-machine technology and a humane path to industrialization demonstrated his recognition of the necessity for a capital-driven industrial model for economic development.

Economic equality was also a central postulate in his concept of Seven Revolutions (Sapta Kranti). Lohia acknowledged the need for economic egalitarianism, which, according to him, could only be achieved if the means and modes of production were distributed at the grassroots level—especially to villages, which he saw as key drivers of enterprise, innovation, and progress.

Lohia’s thought aligns with clauses (b) and (c) of Article 39, emphasizing community-owned distribution of resources and the liberalization of economic opportunities to alleviate poverty and inequality in production and wealth distribution.

2. Marxist Critique of Welfare State Approaches to Redistribution

Critics from the Marxist school of thought argue that welfare state strategies are inadequate and serve merely as superficial solutions to economic inequality. Many Marxists believe that welfare states function within capitalist frameworks, which inherently generate and sustain economic disparities. The mechanisms of progressive taxation, social spending, and other welfare measures are perceived as temporary palliatives rather than genuine solutions to economic injustice.

Marxists contend that these measures do not dismantle the capitalist system, which they view as exploitative. Instead, welfare benefits serve to pacify the working class and prevent revolutionary change, thereby maintaining the status quo. The bourgeoisie, benefiting from surplus value generated by the proletariat, remains dominant, ensuring that capitalism persists.

Marxist philosophy advocates for a fundamental restructuring of economic systems to achieve real social justice. This extends beyond the redistribution of wealth within a capitalist economy to a complete reorganization of the mode of production. Marxists propose the abolition of private property and the establishment of communism—a society without class divisions, where production is collectively owned, and resources are distributed based on need rather than market forces.

Thus, Marxists argue that only radical societal transformation can enable true economic equality, as opposed to the paradoxical effects of the welfare state. This critique provides valuable insights into wealth redistribution mechanisms in a welfare state, which can be examined concerning Articles 39(b) and 39(c) in the Indian legal landscape.

Karl Marx’s core political ethos revolves around his critique of wealth concentration and private ownership of production. He strongly advocates for wealth redistribution and the dismantling of systems that perpetuate economic disparity.

3. Max Weber and the Theory of Free Labour

Max Weber, in his analysis of economic progress, emphasized the role of increasing division of labor. He highlighted the historical example of Roman society, where slavery was perceived as an economic necessity, illustrating how different labor systems shaped economic development.

Weber outlined two primary pathways for economic development:

  • Free labor, which serves as the foundation of economic growth by expanding markets geographically and incorporating more people into economic exchange.
  • Unfree labor, where economic progress is driven by accumulating and organizing unfree workers for specialized occupations.

According to Weber, these two modes of economic organization tend to exclude one another. His theories shed light on how labor dynamics influence wealth concentration and economic disparities, which are key concerns addressed by Articles 39(b) and 39(c) of the Indian Constitution.

H) CONCLUSION

Articles 39(b) and 39(c) of the Indian Constitution embody a commitment to socioeconomic justice, aiming to address the persistent problems of income and wealth disparity in India. These clauses, rooted in the philosophy of egalitarianism, advocate for the fair distribution of material resources and the prevention of wealth concentration.

However, contemporary judicial interpretations, such as those made by the Supreme Court and the Chief Justice of India, highlight the complexities of implementing these constitutional mandates in modern economic contexts. Various sociological perspectives and judicial analyses underscore the challenges of achieving equitable wealth distribution.

Thinkers such as Karl Marx, Ram Manohar Lohia, and Max Weber provide critical insights into the paradoxes and limitations of unbridled capitalism. Their analyses reveal the necessity of targeted interventions that promote economic inclusivity and social mobility for disadvantaged populations.

Ultimately, the fair allocation of resources, as envisioned in Articles 39(b) and 39(c), is crucial for reducing socioeconomic inequalities and fostering a more just society. Revisiting and reinforcing these principles in policymaking can significantly contribute to economic fairness. By aligning economic policies with the ethical imperatives enshrined in the Directive Principles of State Policy, India can move towards a more balanced and equitable socio-economic order, ensuring that the benefits of development are shared equitably across its population.

I) REFERENCES

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    • Nitin Kumar Bharti et al., Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj, World Inequality Lab.
  2. Online Articles / Sources Referred
  3. Cases Referred
    • Kesavananda Bharati Sripadagalvaru vs. State of Kerala, AIR 1973 SC 1461.
  4. Statutes Referred
    • Constituent Assembly of India Debates (Proceedings)- Volume VII, (1948).
    • India Const. 39, cl.b
    • India Const. 39, cl.c
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