Economic Analysis of Laws in India: A Critical Study
Kondaiah Jonnalagadda
Professor of Law, Maharashtra National Law University, Aurangabad, India.
10.46679/9789349926141ch01
This chapter is a part of: Law and Economics in India: Market Governance, Digital Change, and Inclusive Growth from India
ISBN (Ebook): 978-93-49926-14-1
ISBN (Hardcover Print): 978-93-49926-73-8
ISBN (Softcover Print): 978-93-49926-54-7
© CSMFL Publications & its authors.
Published: April 15, 2026
Abstract
This research paper, critically, examines economic analysis of law in India, exploring its theoretical foundation, historical development and practical application within the Indian legal system. It highlights how law and economics, a social science applying economic concepts to the legal relationship, is crucial for analyzing the effects of legal rules. The study delves into Core economic concepts, like efficiency, and Pareto optimality, emphasizing their role as an nautical framework for assessing legal effectiveness and resource location. The paper also discusses the application of Cost Benefit Analysis (CBA) in evaluating legal rules and their legislative impact in India, recognizing its potential to enrich decision-making, despite of relatively new concept in India law. Furthermore, it presents case study illustrating the integration of economic reasoning in Indian judicial decisions, particularly in competition law and market regulation. Finally, the paper addresses challenges and critiques, including distributional impact and behavioral economics and proposes future direction for legal and judicial reforms in India grounded in economic principles.
Keywords: Law and Economics, Efficiency, Pareto Optimality, Cost-Benefit Analysis (CBA), Competition Law and Judicial Reforms
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