Rethinking the regulatory raj

Posted on October 6, 2013  /  3 Comments

The headline suggests the focus is on the capture of regulatory agencies by retired IAS officers. But it is more, a wide-ranging discourse on problems of regulatory governance. It is a pity that the arguments are harmed by sloppy blame attribution: how can TRAI be blamed for spectrum auctions, when the article itself recognizes that is in the province of the Department of Telecommunications?

So how do we reverse this capture of important decision-making bodies by the bureaucracy? In 2006, the Planning Commission published a report (Approach to Regulations: Issues and Options) with some suggestions. The report highlights the fact that there is no uniformity in thinking behind setting up independent regulators. It points to the fact that many of them differ in terms of the extent of powers, tenure of members, selection procedures, and more. The petroleum regulator, for instance, can issue licences but has no say over tariffs. CERC fixes tariffs and issues licences, while trai has only recommendatory powers. To fix these things, it suggests setting up a regulatory affairs department in the Ministry of Personnel and having a minister for regulatory affairs. The idea was to bring in some oversight.

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  1. Appointing Raghuram Rajan as the Governor of India’s central bank is a good example of meritocracy dwarfing the bureaucracy. The writer has referred to FCC commissioners’ appointment but ignored the hiring of Rajan. There is no scarcity of equivalents like Rajan in other sectors. Lawmakers in the world’s largest democracy, however, lacks moral authority to govern the bureaucrats.

    “After the last general election, 162 of the 543 members of the Lok Sabha, the lower house, had criminal cases against them, including charges of rape, murder and kidnapping, according to civil rights watchdogs,” wrote the Financial Times on September 27, 2013. Indian bureaucrats fully exploit the lawmakers’ such abysmal image and fortify their position. Pity!

  2. But how does Bangladesh make appointments to the BTRC and the energy regulatory agency? Perhaps the systems are superior to those in India?

  3. The situation is worse in Bangladesh. We have developed a veracious appetite for everything wrong in India and Pakistan. It has been a tug-of-war between the civil and military bureaucracy in telecom regulatory commission. Civil servants control the energy regulator. Disgraced military dictator Ershad had hijacked the civil aviation authority and gave it to air force. No democratic government, since deposing Ershad in 1990, has changed it. The list is long, very long…..