New Delhi, Aug. 12 -- Globally, efficient contract enforcement is a prerequisite for economic competitiveness. In India's case, conservative estimates suggest that legal uncertainty and procedural delays impose a direct cost of 1.5-2% of GDP each year. But the deeper wound comes from the opportunity cost-estimated to be two to three times greater-related to deferred investments. This acts as a hidden tax on enterprises.

Economies like the US and China that have enjoyed high investment and growth have made deliberate efforts to improve their dispute resolution systems.

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For example, the US has large-scale and specialized arbitration institutions. The US Sup...