Regulatory Authorities & Agencies Notes for UPSC

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regulatory authorities and agencies

Regulatory authorities


  • 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.


  • 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  • Outdated Legal Framework—Telecom sector still governed by Indian Telegraph Act, 1885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. 
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  • ↑ 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–
    1. Parliamentary oversight of regulators be ensured through respective DRSCs.
    2. Periodic evaluation of regulators by external agencies
    3. Involve citizens, professional org in regulation activities.
    4. Need for uniformity in structure of Regulators (Terms of App, tenure & removal  etc)
  • FSLRC recommendations–
    1. Financial independence through independent sourcing of finances such as fees.
    2. Merge Regulators like SEBI, IRDA & PFRDA
    3. 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.