- 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.
- Regulations and guides
- Review and assessment
- Licensing & Inspection
- Corrective actions & Enforcement.
- To support Dev of market of allocated jurisdiction.
- 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
- 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- Outdated Legal Framework—Telecom sector still governed by Indian Telegraph Act, 1885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.
- ↑ their Independence & autonomy (Functional & financial) with corresponding A/C & T/P
- Adopt best practice like “Regulatory Impact Assessments” (OECD)
- Single Umbrella regulator–Mooted by Mistry committee, Raghuram Rajan committee, FSLRC
- 2nd ARC–
- Parliamentary oversight of regulators be ensured through respective DRSCs.
- Periodic evaluation of regulators by external agencies
- Involve citizens, professional org in regulation activities.
- Need for uniformity in structure of Regulators (Terms of App, tenure & removal etc)
- FSLRC recommendations–
- Financial independence through independent sourcing of finances such as fees.
- Merge Regulators like SEBI, IRDA & PFRDA
- Est a comprehensive and enforceable code of conduct.’
Need for an empowered regulatory regime to make sectors of economy robust & smoothly mitigate economic impacts of Covid -19.