Address regulatory capture and make the regime more accountable: Gajendra Haldea

New Delhi, October 21, 2010

“Infrastructure regulation in India is suffering from regulatory capture due to non-accountability of regulators and various other factors, and this is reason for having an overarching law for regulatory reform in India,” said Gajendra Haldea, Adviser to the Deputy Chairman of the Planning Commission of India. He was speaking at a meeting on the Draft Regulatory Reform Bill organised by CUTS International in partnership with the Planning Commission of India. It is necessary to have a comprehensive study to understand the political economy of regulatory reform in India, he added.

The meeting was a part of the consultative process being followed by the Planning Commission to receive comments and suggestions on this Bill from various groups of stakeholders. Its objective was to further the cause of regulatory reform in India and engage the Indian consumer movement with the process of regulatory reform. More than 40 participants representing the Indian consumer movement took part in its deliberation.

Welcoming the participants, Pradeep S. Mehta, Secretary General of CUTS International said that consumer organisations are in favour of an effective regulatory regime in India so that they benefit from good quality services at affordable prices. He urged the Planning Commission to implement a comprehensive programme to develop the capacity of Indian consumer organisations to understand the importance of regulatory reforms and their impact on consumers.

Commenting on the Bill, Ashim Sanyal of VOICE said that regulatory bodies should not serve as sinecures for retired bureaucrats but be formed of professionals and technical experts. Shantanu Dixit of PRAYAS suggested a more institutionalised form of capacity building of the staff of regulatory agencies. In order to make the Indian regulatory regime more effective, there should be an independent, analytical scrutiny of regulatory orders, he added.

Mr. Haldea asked the participants to submit a set of specific, section by section recommendations on the Bill. “We would be happy to receive brutally frank recommendations,” he said. The meeting decided to form a Working Group of Consumer Organisations which will submit a revised bill to the Planning Commission.

He asked CUTS to prepare a note covering issues relating to the interface between the Competition Commission of India and sectoral regulatory bodies by drawing experiences from other countries. It was discussed that while the competition authority should look at behavioural issues, sectoral regulators should confine themselves to structural issues of competition and consumer protection.

Representatives of consumer bodies urged for the creation of a dedicated consumer advocacy fund in every regulatory bodies so as to use it for upholding consumer interests through education and awareness generation. A mechanism for this purpose will be devised and submitted to the Planning Commission.

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