Independent bodies est to set stds in a specific field of activity & enforce those stds, Ex—RBI, SEBI, CCI, NPPA, TRAI, IBBI
Art 53(3) authorises Parliament to confer by law regulatory functions to authorities.
Functions—
Regulations and guides
Review and assessment
Licensing & Inspection
Corrective actions & Enforcement.
To support Dev of market of allocated jurisdiction.
Origin
LPG—Rolling back of state + ↑ role of market—Advent of Regulatory regimes for arm’s length superintendence of specific sectors + Act as ‘nurturer’ & ‘parent’ of its sector—Played a constructive role
Need for Independent Regulators
To Prevent Market Failure—For efficient allocation of resources to maximise social welfare
Can occur bcz of natural monopolies or asymmetric information, externalities (-ve—Putting ‘Pigovian Tax’, Clean Energy Cess are ex of regulation)
Boost investor confidence (By ensuring free & fair market)–Incentivise Pvt investment by giving them functional autonomy & shielding them from interference
Ensuring orderly & sustained growth of the sector, attracting private investment, enhancing consumer protection
To check anti-competitive practices like cartelization
To Protect & promote Public interest
BIS Set quality & safety stds for various products
RBI— In tackling liquidity crisis & Mgt of NPAs
Issues
Politicisation, Selection of non- experts, Inefficient review mechanism
Their Recommendations r rarely implemented
Overlapping jurisdiction—
Env—CPCB & NGT
Controversy b/w SEBI & IRDAI over ULIP
Edu—AICTE & UGC
Adm Incoherence—Unlike other countries (US have Adm Procedure Act, 1946)—India does not have an overarching Adm statute in India.
Lack of A/C—Less Parliamentary supervision
Structural Weakness, Not aligned to global standards
Outdated Legal Framework—Telecom sector still governed by Indian Telegraph Act, 1885
Lacks of overarching policy that specify sector wise roles & R/S of the regulators– impinges on their independence & conflicting responsibilities.
