Daily Editorial Analysis 27 October 2025

The Contours of Constitutional Morality

Context

• The relationship between law and morality has long occupied jurists, philosophers, and lawmakers alike.
• It is an enduring question: should the law enforce moral standards, or should it remain neutral, detached from ethical imperatives?
• From the ancient notion of dharma to the modern constitutional framework, India’s legal evolution reflects this tension between moral values and legal obligations.
• The dialogue between morality and law, far from being a relic of philosophical discourse, remains crucial to the vitality of modern constitutional democracy.

Law and Morality: A Historical Context

• The debate over the intersection of law and morality reached its zenith during the Hart–Devlin debate (1960s).
• Lord Devlin argued that law must enforce moral standards to preserve societal cohesion, while H.L.A. Hart warned against conflating moral disapproval with legal prohibition.
• This theoretical divide found reflection in Shaw v. DPP (1962 AC 220), where the House of Lords affirmed a residual power to conserve not only the safety and order but also the moral welfare of the State.
• The Indian judiciary has also recognised this relationship. In Rathinam v. Union of India (1994), the Supreme Court quoted Justice Frankfurter’s observation in Solesbee v. Balkcom (1949) that the law embodies a system of rights based on moral principles … which comports with the deepest notions of what is fair and right and just.
• This understanding resonates with India’s civilisational ethos, the ancient concept of dharma, which unified legal duty and moral virtue.
• The Tirukkural, for instance, emphasised Aram (virtue) as the foundation of righteous living, demonstrating that law and morality were once inseparable in Indian thought.

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Dynamic Interaction Between Law and Morality

• The interplay between law and morality is neither static nor one-dimensional. Sometimes, law leads morality, as seen in the abolition of untouchability, which preceded full social acceptance.
• At other times, law follows morality, as in the gradual recognition of gender equality shaped by evolving public consciousness.
• This dynamic underscores the law’s dual function: to reflect society’s ethical standards and to guide them toward higher ideals.
• Yet, this also presents a challenge: laws must embody fundamental ethical imperatives, not merely majoritarian opinions or transient sentiments.
• For a diverse and pluralistic democracy like India, such balance is essential to ensure justice, inclusivity, and legitimacy.

Constitutional Morality: The Indian Perspective

• The Supreme Court of India has deepened this moral discourse through the doctrine of constitutional morality.
• In State (NCT of Delhi) v. Union of India, the Court held that constitutional morality is more than mere allegiance to constitutional text.
• It includes liberal values, participatory governance, and ethical conduct by constitutional functionaries.
• Similarly, in Justice K.S. Puttaswamy (Retd.) v. Union of India, the Court affirmed that constitutional morality requires the state to act within the bounds of the rule of law and to respect judicial orders.
• These judgments collectively affirm that constitutional morality serves as a normative compass, ensuring that power is exercised with fairness, accountability, and restraint.
• Thus, morality in governance is not optional, it is a constitutional obligation.

Beyond the Courts: Accountability and Democratic Ethics

• Breaches of constitutional morality may not always be legally punishable.
• They can manifest as violations of constitutional conventions or democratic principles, which are best remedied through political and civic accountability, in Parliament, the media, or by the electorate.
• This broader understanding reminds us that courts are not the sole guardians of constitutional ethics.
• The preservation of constitutional morality is a shared responsibility, among citizens, lawmakers, and public institutions.

The Road Ahead: Nurturing Constitutional Morality

• The future of India’s democracy depends on the cultivation of constitutional morality among lawmakers, judges, and citizens alike.
• As Dr. B.R. Ambedkar wisely cautioned, constitutional morality is not a natural sentiment, it has to be cultivated.
• When nurtured, it transforms the Constitution from a legal document into a living moral charter, one that guarantees justice, equality, and inclusion.
• In an era of rapid change, constitutional morality provides the ethical foundation necessary to uphold human dignity and democratic stability.

Conclusion

• The relationship between law and morality is both timeless and evolving.
• From the ancient principle of dharma to modern constitutional jurisprudence, morality has remained the soul of justice.
• To ensure that democracy is not a mere top dressing on Indian soil but its vital ingredient, India must continue to nurture constitutional morality.
• It is this moral consciousness that will determine whether the Constitution remains a document of ideals or becomes a vibrant, equitable reality, the living embodiment of justice in action.

The Contours of Constitutional Morality FAQs

Q1. What central issue around the morality of the constitution?
Ans. The essay explores the complex relationship between law and morality, focusing on how they influence and shape each other in legal and constitutional contexts.

Q2. What was the main point of disagreement in the Hart–Devlin debate?
Ans. The Hart–Devlin debate centred on whether the law should enforce moral standards, with Devlin supporting moral enforcement and Hart opposing it.

Q3. How has the Supreme Court of India interpreted the idea of constitutional morality?
Ans. The Supreme Court has defined constitutional morality as adherence to liberal values, ethical governance, and respect for the rule of law and judicial authority.

Q4. What role does constitutional morality play in a democracy?
Ans. Constitutional morality ensures that power is exercised with fairness and accountability, making democracy a moral and living system rather than a mere legal structure.

Q5. What advice did Dr. B.R. Ambedkar give about constitutional morality?
Ans. Dr. B.R. Ambedkar advised that constitutional morality is not inherited but must be cultivated and practiced to sustain a just and vibrant democracy.

Source: The Hindu

Winding Up the Clock of India-Nepal Economic Ties

Context

• On October 1, 2025, Reserve Bank of India (RBI) Governor Sanjay Malhotra announced a set of measures aimed at internationalising the Indian rupee (INR).
• While these initiatives have broad regional implications, they hold special promise for strengthening the economic relationship between India and Nepal.
• The new RBI policies, allowing authorised dealer (AD) banks to lend rupees to non-residents, permitting Special Rupee Vostro Accounts (SRVAs) to invest in corporate instruments, and establishing transparent reference rates for major currencies, signal a deepening of financial and trade cooperation.
• For Nepal, these developments could mean easier access to credit, stronger trade integration, and a potential transformation in its macroeconomic resilience.

The RBI’s Measures: Pathways to Integration

• The first measure allows AD banks in India to extend rupee-denominated loans to non-residents from Nepal, Bhutan, and Sri Lanka for cross-border trade.
• This reform addresses a long-standing gap in institutional credit, particularly for industries engaged in India–Nepal trade.
• The second measure expands the scope of Special Rupee Vostro Accounts to include investments in corporate bonds and commercial papers, thus enhancing cross-border capital flows.
• The third initiative, establishing a transparent reference rate for major currencies, introduces predictability and reduces exchange rate volatility, making INR-based transactions more efficient and reliable.
• Collectively, these steps not only promote the rupee’s international role but also facilitate smoother trade settlements and stronger financial cooperation between India and its neighbours, particularly Nepal.

Nepal’s Domestic Constraints and the Credit Challenge

• Despite steady remittance inflows, Nepal continues to face structural weaknesses in its economy.
• After a partial recovery from the COVID-19 pandemic, its industrial performance remained stagnant due to a lack of business confidence and restricted access to credit.
• Nepalese banks, often controlled by large industrial houses, have been conservative in lending to small and medium enterprises (SMEs).
• This has resulted in credit bottlenecks, weak supply chains, and limited employment opportunities, fuelling economic instability and political unrest.
• By allowing Indian banks to lend directly in INR, the RBI’s policy provides alternative credit channels for Nepalese enterprises.
• Access to competitively priced loans could encourage industrial expansion, improve liquidity, and boost participation in cross-border trade, thus offsetting Nepal’s domestic financial rigidity.

The Dynamics of India–Nepal Trade

• The India–Nepal economic relationship is defined by deep interdependence. India accounts for nearly 65% of Nepal’s international trade, with exports from India exceeding $8 billion and imports from Nepal around $1 billion.
• Indian firms remain major investors in Nepal, contributing 33% of total FDI worth approximately $670 million.
• Despite the asymmetry, the partnership serves as a vital economic lifeline for Nepal, offering market access, investment capital, and technological linkages.
• The exchange rate peg of 1.6 Nepalese rupees to 1 Indian rupee has provided monetary stability and shielded Nepal from sharp currency depreciations.
• Maintaining this peg, while enabling new credit and investment avenues, reinforces macroeconomic confidence and trade-led growth.
• Thus, the RBI’s measures can deepen financial interlinkages without disturbing the existing monetary equilibrium.

Strategic and Economic Multiplier Effects

• Beyond trade, the RBI’s measures have strategic implications. Increasing the use of INR in Nepal’s transactions will reduce dependency on the U.S. dollar and mitigate exposure to global currency volatility.
• This can ease pressure on foreign exchange reserves, narrow the Current Account Deficit (CAD), and enhance financial stability.
• A robust INR–NPR financial ecosystem may also promote joint ventures, industrial clustering, and value-added processing for export-oriented growth.
• From India’s standpoint, these steps align with its ambition to make the rupee a regional trade currency, thereby strengthening India’s financial influence and economic diplomacy amid a changing global monetary landscape.

The Way Forward: Implementation and Institutional Coordination

• The success of these policies depends on institutional cooperation.
• The Nepal Rastra Bank (NRB) must interpret, adapt, and implement the RBI’s framework while safeguarding Nepal’s monetary interests.
• Developing compliance mechanisms, risk assessment protocols, and prudential norms will be essential for effective adoption.
• Collaboration on sovereign guarantees, Letters of Credit, and country risk ratings will help institutionalise bilateral trust.
• The RBI’s reputation for prudence, combined with the NRB’s reciprocation and adaptability, could lay the groundwork for a sustainable financial partnership that enhances regional monetary stability and trade competitiveness.

Conclusion

• The RBI’s October 2025 announcements mark a turning point in India–Nepal economic relations.
• By promoting the internationalisation of the rupee in a regionally inclusive manner, these reforms offer Nepal an opportunity to overcome its credit constraints and enhance its trade competitiveness.
• At the same time, India consolidates its position as a regional financial anchor and a driver of South Asian integration.
• The ultimate success of these initiatives will depend on regulatory synchronisation, institutional readiness, and a shared economic vision.

Winding Up the Clock of India-Nepal Economic Ties FAQs

Q1. What was the main objective of the RBI’s October 2025 announcement?
Ans. The main objective of the RBI’s October 2025 announcement was to promote the internationalisation of the Indian rupee (INR) and strengthen regional economic and trade cooperation, especially with countries like Nepal, Bhutan, and Sri Lanka.

Q2. How can Indian banks lending in INR benefit Nepalese businesses?
Ans. Indian banks lending in INR can provide easier access to institutional credit for Nepalese businesses, helping them expand operations, improve liquidity, and enhance participation in cross-border trade with India.

Q3. Why is the INR–NPR exchange rate peg important for Nepal?
Ans. The INR–NPR exchange rate peg of 1.6 Nepalese rupees to one Indian rupee is important because it maintains monetary stability and protects Nepal’s currency from sharp depreciation against major foreign currencies.

Q4. What larger impact might the RBI’s measures have on Nepal’s economy?
Ans. The RBI’s measures could reduce Nepal’s dependence on the U.S. dollar, ease foreign exchange pressures, and boost industrial growth and employment, leading to greater economic stability and resilience.

Q5. What role does the Nepal Rastra Bank (NRB) play in implementing these changes?
Ans. The Nepal Rastra Bank (NRB) must adapt and enforce the RBI’s framework, ensure compliance and financial safeguards, and coordinate policies to fully realise the benefits of India’s rupee internationalisation strategy.

Source: The Hindu