The Constitution is extensive, containing numerous provisions that affect every Indian citizen. Certain provisions of the Indian Constitution are applicable to business, and they are summarized below:
Preamble of Constitution and Business:
The Indian Constitution begins with a preamble that outlines the Constitution’s main goals. It should be noted that, while the preamble is not a part of the Constitution and is not justified, its importance cannot be overstated.
It is a key to the Constitution. When the judiciary is unsure about a particular provision of the Constitution, it refers to the preamble to determine the true intentions of the Constitution’s framers. According to the preamble:
“We, the People of India, have solemnly resolved to establish India as a Sovereign, Socialist, and Secular Democratic Republic, ensuring to all its citizens:
Liberty of thought, expression, belief, faith, and worship; Justice, social, economic, and political;
Equality of status and opportunity; and to promote fraternity among them all, ensuring the dignity of the individual as well as the unity and integrity of the nation;
This Constitution is Adopted, Enacted, and Given to Us by Our Constituent Assembly on the 26th of November, 1949.”
The preamble states that India will be a Sovereign, Socialist, Secular, and Democratic Republic. It means that India, like other states, is a sovereign state free to conduct its internal and external relations as it sees fit.
The Forty Second Amendment added the terms “socialist” and “Secular” to assert that the government must adopt socialistic policies to ensure a decent life for all Indian citizens. The word ‘Secular’ is also included to emphasize that the state must refrain from giving preferential treatment to any religion.
Democratic government implies that the government is to be carried on by the people’s elected representatives, and the government remains in office as long as the people’s elected representatives trust it. The term “republic” implies that the highest executive authority in India will be held by someone directly elected by the people. In other words, the monarchical or feudal systems have no place in India.
Economic Importance: The Indian Constitution’s preamble guarantees to every citizen:
- Economic Justice: The Indian Constitution guaranteed social, economic, and political justice to all citizens. As a result, it is the responsibility of business organizations to provide social, economic, and political justice to all citizens.
- Liberty of Thought, Expression, Belief, Faith and Worship: Our constitution recognizes that every citizen has the right to free thought, expression, belief, faith, and worship. According to this concept, every business or organization should be free to think, express themselves, and interact with anyone.
- Equality of Status and of Opportunity: Every businessman should believe in this concept and provide equal opportunity to others. This can be accomplished by eradicating poverty. This does not imply closing the gap between the rich and the poor.
Fundamental Rights and Business
The Indian Constitution includes a list of Fundamental Rights that are protected by executive and legislative authorities. Part III (Articles 12-35) addresses the Individual Fundamental Rights. The committee of the Constituent Assembly headed by Sardar Vallabhbhai Patel finalized these rights.
Fundamental rights supersede ordinary laws; they can only be changed through constitutional amendments. Originally, there were seven fundamental rights, but the right to property was removed from the list in 1978 as part of the 44th amendment to the constitution.
The six types of constitutional fundamental rights are as follows:
Right to Equality (Articles 14 to 18): Articles 14–18 address the right to equality. The Constitution states unequivocally that the state shall not deny any person equality before the law or equal protection of the law within the territory of India. It may not discriminate against any citizen on the basis of religion, race, caste, gender, or place of birth, or any combination of these factors.
It means that every citizen has access to shops, public restaurants, hotels, places of public entertainment, and so on, and is free to use state-maintained wells, tanks, roads, and places of public resort. In terms of employment, all citizens shall be given equal opportunity for appointment to state offices, and no one shall be denied employment on the basis of religion, race, caste, sex, descent, or any of these factors.
To make the right to equality a reality once more, untouchability has been abolished and its practice in any form has been made a criminal offense punishable by law. These articles state that businesses must provide equality before the law, social equality, and economic equality.
Right to Freedom (Articles 19 to 22): Articles 19 to 22 enumerate certain positive rights granted by the Constitution in order to promote the preamble’s promise of liberty. The article guarantees citizens six fundamental rights in the nature of “freedom” (originally there were seven, but now right to property is deleted).
The six liberties are as follows:
- Freedom of speech and expression.
- Freedom of peaceful assembly without arms.
- Freedom of association.
- Freedom of movement across India’s territory.
- Freedom to settle in any area of the country.
- Freedom to engage in any occupation, trade, or business, as well as to practice any profession.
The right to freedom is equally applicable in business. Businessmen can freely express their concerns to the government and receive solutions. Similarly, every citizen has the right to choose any business or profession, as well as the right to form unions and hold meetings.
Right against Exploitation (Articles 23 to 24): Articles 23 to 24 deal with the right against exploitation and seek to prevent unscrupulous individuals as well as the state from exploiting the weaker sections of society. Article 23 outlaws human trafficking, involuntary labor without pay, and other forms of forced labor. Article 24 forbids the employment of children under the age of 14 in factories and hazardous occupations, as well as the employment of women in night shifts in factories.
Economic Importance:
- Right against exploitation
- The government eliminates bonded labor by taking the required actions.
- The Factories Act helps to prevent the exploitation of female and child workers.
The factory owners are directed to make provisions for the safety and welfare of the workers, and they are required to appoint a labor welfare officer, if 500 01 more workers are employed in the factory.
Right to Freedom of Religion (Articles 25 to 28): Articles 25 to 28 address the right to religious freedom. Citizens have freedom of conscience and are free to profess, practice, and propagate any religion, subject to public order, morality, and health.
The state, on the other hand, has the authority to regulate or restrict economic, financial, political, or other secular activities associated with religious practices. No citizen may be forced to pay taxes whose proceeds are to be used to promote or maintain any particular religion or religious dominance.
Economic Importance:
- The economic significance of the right to religious freedom is
- The government cannot use tax dollars to promote any religion.
- Nobody can be forced to pay taxes for the benefit of any particular religion.
- No one shall be compelled to transfer property or enter into any business agreement in the name of a particular religion.
Cultural and Educational Rights (Articles 29 to 30): Article 29 states that the State shall not impose any culture other than the culture of the community. A minority group has the right to protect its culture and religious beliefs. Article 30 grants a minority community the right to establish and manage educational institutions of their choosing.
The educational and cultural right is notable in that, unlike other fundamental rights, it is unrestricted, with the exception that the State may make special provisions for the advancement of any citizens from socially or educationally underprivileged backgrounds.
Economic Importance:
- Cultural and educational rights are economically significant because the state does not discriminate in providing financial assistance to minority institutions.
- The aided institution may not refuse admission to any citizen on the basis of his or her caste, religion, language, or region.
Right to Constitutional Remedies (Article 32): Dr. Ambedkar called this right the “heart and soul of the Constitution.” The mere declaration of fundamental rights is meaningless unless effective remedies for their enforcement are available. This has been ensured by Article 32, which grants the right to petition the Supreme Court through appropriate proceedings for the enforcement of the Constitution’s rights.
Clause (2) of Article 32 grants the supreme court the authority to issue appropriate directions or orders to writs, including writs in the name of habeas corpus, mandamas, prohibition, quo-warrant, as well as certiorari, in order to enforce any rights granted by Part III of the Constitution.
Thus, the fundamental rights enumerated in the constitution provide citizens with a variety of economic and social benefits. At the same time, the state has the authority to impose reasonable restrictions on such rights in the public interest.
Directive Principles of State Policy
The Directive Principles of State Policy enshrined in Part IV of the Constitution aim to realize the high ideals of justice, liberty, equality, and fraternity outlined in the constitution’s preamble. There are ideas to motivate the state to work for the general welfare of the people and to establish social and economic democracy in the country.
The phrase ‘Directive Principles of State Policy’ refers to the principles that states should keep in mind when drafting laws and developing policies. The various directive principles are contained in Articles 39 to 51. These principles are a synthesis of socialistic, Gandhian, and liberal ideas.
Economic Importance: The Directive Principles of State Policy have the following economic significance:
- To provide adequate means of subsistence for all citizens.
- To protect the workers, especially children.
- To control the nation’s economic structure so as to prevent the concentration of wealth and production resources.
- To make provisions for securing the right to work, education, and public assistance in cases of unemployment, old age, sickness, and other similar circumstances.
- To provide a decent standard of living and recreational opportunities for all employees.
The above-mentioned directive principles’ main goal is to enable the individual to live a good and satisfying life. All provisions of state policy directive principles guide the government’s policies toward business and other economic and social activities.
In addition, the government has enacted a number of acts and laws, policies and rules based on the directive principles that are directly related to business operations. FERA, Factories Act, MRTP Act, Minimum Wage Act, Industrial (Development and Regulation) Act, Industrial Policy, and other Acts are founded on Constitutional Directive Principles.
Through these acts and regulations, the government protects the interests of working men, women, and children, prevents economic power concentration, and promotes and protects the interests of small and cottage industries.
Constitutional Clauses Governing Trade, Commerce, and Sexual Relations on Indian Territory
Articles 301 to 307 of the Indian Constitution deal with the constitutional provisions governing trade and commerce. The framers of the Indian Constitution were well aware of the importance of maintaining the Union of India’s economic unity. The free movement and exchange of goods across India’s territory were critical for the country’s economic unity, which alone could sustain the country’s progress. Prior to India’s integration and the implementation of the new constitution, there were a large number of Indian states that, in exercising their sovereign powers, had erected customs barriers between themselves and the rest of India, obstructing the free flow of commerce at several points along the boundaries of those Indian states. Thus, the primary goal of Article 301 was clearly to encourage the free flow of trade and commerce throughout India’s territory. The term ‘trade’ refers to the buying or selling of goods, whereas the term ‘commerce’ refers to all modes of transportation, including land, air, and water.
The term “intercourse” refers to the movement of goods from one location to another. Thus, the phrase “trade, commerce, and intercourse” encompasses all activities that are likely to fall under the purview of commerce. The power of parliament to impose restrictions on trade, commerce, and intercourse is explained in Article 302 of the Indian Constitution.
It may be imposed by law by the Parliament. Such restrictions on the freedom of trade, commerce, or intercourse as may be required in the public interest between one state and another or within any part of India’s territory.
Article 303 addresses the limitations on the legislative powers of the Union and the states in matters of trade and commerce. It states that parliament does not have the authority to pass any law favoring one state over another based on any entry relating to trade and commerce in any of the lists in the VIIth Schedule. However, under Clause (2) of this article, the parliament may discriminate between states. If a law declares that it is necessary to do so in order to deal with a situation arising from a scarcity of goods in any part of India’s territory. The parliament must decide whether there is a scarcity of goods in any part of India.
Article 304 defines the state’s authority to regulate trade and commerce. The specifics are as follows: (a) impose any tax on goods imported from other states (or Union Territories) that similar goods manufactured or produced in that state are subject to. However, so that no distinction is made between goods so imported and goods so manufactured or produced; and (b) impose such reasonable restrictions on the freedom of trade, commerce, or intercourse with or inside such state as could be necessary to serve the public good.
Article 305 saves existing laws and laws establishing state monopolies insofar as the president may otherwise direct by order. Article 307 empowers parliament to appoint whatever authority it deems necessary to carry out the purposes of Articles 301, 302, 303, and 304. It may delegate to such authorities whatever powers and duties it deems necessary.