In modern societies, fines are a popular means of penalising offenders. Provisions in most Indian statutes also incorporate fines as penalty.

However, the fixed penalty system that prevails in India raises important concerns. It is imperative that these issues are addressed to ensure that fines retain their legitimacy as a form of punishment.

Statutes, once legislated, are not changed frequently. As a result, India is replete with statutes with outdated penal provisions. Consider the Prevention of Cruelty to Animals Act, 1960. According to its penal sections, the maximum fine imposed for committing offences under the act is Rs 500. At the time of its enactment in 1960, 500 rupees must have been considered to be severe; inflation has eroded the value of this sum today. Thus, a penalty of 500 rupees is unlikely to serve as a deterrent as envisaged by Parliament originally.

The inflationary factor can have far-reaching consequences. Courts, frustrated by their inability to impose fines commensurate with the infraction, might be forced to consider alternative measures to achieve some balance between the sentence and the offence. It would be a travesty of justice if short-term imprisonment is considered to be one such option.

The Constitution upholds the principle of equality. Equality before the law implies that poor offenders are treated no worse than wealthy ones. But discriminatory elements can creep into sentencing on account of factors that are not integral to the evaluation of the court. Fines often lead to lenient punishment for offenders with sufficient finances. This gives birth to the perception that there is one law for the poor and another for the rich.

The question of balance can also be compromised in favour of administrative efficiency. For example, fines for a large number of motoring offences do not vary according to the means of the offender. Here, consistency of penal measures takes precedence over the consistency of penal effect. In other words, the punishment for an offence is the same for everyone irrespective of the impact such measures may have over a person because of such factors as income and family size.

Incidentally, Scandinavian countries — they, arguably, have the most advanced legal systems in the world — employ a system of day fines or unit fines to determine the penalty amount for offences. In a unit fine system, the number of unit fines represents the severity of the punishment imposed on the accused. The amount to be paid for every unit fine is calculated on the basis of the financial situation of the accused. Thus, the units would be different for people with different incomes. This legal system also accounts for inflation since the units are derived from the present income of the offender.

But the Scandinavian system may not be replicated effectively in India because of realities that are peculiar to India. Determining the income of individuals itself is a Herculean task, especially when the unorganised sector provides employment to most people in this country. Further, the time consumed in order to investigate the income of a person would add another step in the judicial determination process. This would put even more pressure on the system and can easily multiply delays, which already plague the judiciary in the country.

Indexation of fines might provide a workable solution. A scale can be used to categorise offences on the basis of severity. The monetary fine range of each category can be determined and revised by the Law Commission in regular intervals to account for inflation. The system of indexation can be implemented much more easily in India than the unit fine system since it remains, in essence, a fixed penalty system with the variation caused by inflation that is accounted for. It would also save crucial time for Parliament and assemblies.

Britain, from where we derive much of our modern legal heritage, has a system of indexation of fines. Indexation of fines would be a step in the direction of modernising the antiquated legal system in India.