Costs of regulation must be justified by its benefits: TRAI Chief Sharma

KNN India, April 17, 2018

A regulator is duty bound to upgrade and update its knowledge. Learning the technical aspects is not enough and knowledge of impact of regulation is also necessary”, observed Dr. R. S. Sharma, Chairman, Telecom Regulatory Authority of India (TRAI).

He was speaking at the launch of two-day training programme on Regulatory Impact Assessment (RIA) jointly conducted by National Institute of Public Finance and Policy (NIPFP) and CUTS International.

RIA is globally recognised regulation making framework which requires regulators to systemically assess costs and benefits of the proposed regulations. RIA ensures that clear regulatory objectives exist and the regulatory option chosen has the potential to deliver maximum net benefits to the society. Assessment of costs and benefits is conducted through an in-depth stakeholder consultation process thus enhancing transparency.

Dr. Sharma recalled that CUTS International had organised a similar training programme on RIA in 2016, which was immensely helpful, and was the trigger for the current training programme. Scott Jacobs of Jacobs, Cordova and Associates, US was the resource person in 2016.

Regulations in any sector, including telecom, impacts the businesses directly and the response to regulations impact consumers. It needs to be ensured that regulations should impact the society positively. Assessing direct and indirect costs and benefits requires certain skill sets for which capacity building is necessary.

Speaking on the occasion, S.K. Gupta, Secretary, TRAI, that often it is claimed that consumers are benefitting from regulations but the same may not be the case no structured process to assess costs and benefits exists.

It is for this reason that a streamlined process for assessment of costs and benefits is required. RIA is useful in determining the need for regulation. Often, no regulation has been recommended as a best case scenario. However, a no regulation scenario may have its own adverse consequences. Consequently, to achieve a balanced regulatory framework, RIA is essential.

Dr. Ajay Shah, NIPFP, while providing his opening remarks noted that there is a need to building state capacity in the regulatory agencies. State capacity is about having tangible legal instruments and process management. As regulatory agencies work within democratic deficit, they need to institutionalise mechanisms of consultations and possesses and display technical expertise, through a research based approach.

The training programme is scheduled from 16-17 April 2018. Around 40 officials from TRAI are participating in the training programme.

Resource persons in the training programme include Dr. V. Sridhar, IIIT Bangalore; Dr. Siddharth Mitra, Jadavpur University; Amol Kulkarni, CUTS International, among others.

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