All prosperity is a result of division of labour, and division of labour necessitates and is made possible by economic transactions. Except across the counter sale and purchase of the goods, most economic transactions involve time lapse. The transaction is completed after some lapse of time. Goods are supplied, payments follow after lapse of some time. Or advance payments are made and supply is done later. Or future payments are promised against future supply of agreed goods. And that is where the trust levels and state of integrity of the society, and effectiveness of the dispute resolution systems in the society, play a decisive role.
If the sanctity of contracts and agreements and promises is not upheld by a society as a moral imperative, and law is too tedious/slow/time consuming/corrupt to be of any practical use to enforce contracts, it is clear that contracts entered into will be less and less with passage of time. This will mean economic transactions will reduce, and with that division of labour will be negatively impacted, leading to economic decline of the society.
Another possible result of the above may be that both the parties will try to escalate the cost to cover the risk. The goods will become costlier, making growth difficult.
All businesses and industries are basically contracts and agreements only: between supplier and purchaser, those who construct works and those who get them constructed, suppliers of equipment and other capital goods and their purchasers, sellers and purchasers of consumer goods, and employers & employees.
When we hear the word contract and contractors, image comes to mind of the govt contractors. But overall in economy, they are not significant. Private to private is where lies the bulk of contracts.
The story of contracts and agreements in India is one of cheating, fraud, thuggery, breach of promises, bounced cheques, salaries not paid, employees not coming to work on time, or absenting from work without any notice, or not working after reporting for the work, companies disappearing overnight.......
If there is one factor that above all else is responsible for poverty and unemployment in India, it is lack of the sanctity of the contracts and agreements.
It directly leads to not many businesses and industries being set up in India. So little real wealth is created in India, especially when to become rich quick option to defraud others is readily available, without any fear of law, and equally readily is available the option of fleecing the poor through private lending business.
And of course high and mighty fleece everybody through currency inflation, I.e., printing of currency to meet the govt expenditure, and by making banks to extend them loans through fiduciary media.
The State in India is the biggest violator of the contracts. Not only the State has the largest number of the court cases of the contractual disputes, it violates the most basic contract: it charges us (tax) to protect us, and then uses the power to become the biggest and the most powerful extortion gang in the town instead of providing safety and security and justice delivery system. Those who deal with govt departments would readily agree. Your legitimate business is not done by the State till you pay bribes. And daily it issues regulations where you need to deal with the State ever more.
Result is a hungry, unemployed, lawless, collapsing India governed by a thieving, remote elite. The corruption that rules India easily defeats technology that elsewhere succeeds. Uber taxi app is a roaring success all over the world, but in India it has failed because there is flagrant violation of contracts among all the parties involved, including the taxi users. Online shopping also is not growing in India to the potential scope because the sellers cheat, the buyers cheat, and the delivery boys cheat. And there is no recourse to justice available to any party.
A society ravaged by hundreds of years of tyranny of worst kind was gross unlucky that even after gaining Independence its rulers chose socialism as the economic philosophy which has further corrupted all organs and segments of the society.