Regulators may come under Parl lens

NEW DELHI: The finance ministry and the Planning Commission have come in support of a proposal to bring the regulators of various sectors under Parliamentary scrutiny. If implemented, this would mean the regulators of telecom, power and other key sectors will be accountable to an exclusive Parliamentary standing committee.

One argument in favour of such a scrutiny is that the United Kingdom, which has a comprehensive regulatory system, does subject the regulators to Parliamentary scrutiny. The finance ministry has, however, stressed that the regulator must be fully empowered and delinked from any governmental influence before being made accountable to Parliament.

After initial consultations on the issue, the government is now considering establishment of a standing committee on independent regulators. Government sources said a committee of secretaries, headed by cabinet secretary B K Chaturvedi, is looking into the issue and a final decision is expected after considering the views of various departments.

While the finance ministry and the Planning Commission are supporting the proposal, some key ministries like petroleum and power have opposed the move. The ministries are of the view that several provisions are already in place to ensure that rules and regulations framed by regulators are implemented only after Parliament approval.

The idea of bringing the regulators under Parliament’s glare has roots on a proposal by former finance minister Yashwant Sinha. The BJP leader, now a Rajya Sabha MP, had stressed that there was a need to develop a mechanism to ensure that Parliamentary oversight is maintained on the functions assigned to regulators. Since the government would increasingly delegate many of its existing roles to regulators as part of economic reforms, there was a need make regulatory bodies answerable to Parliament, Mr Sinha felt.

The finance ministry, while backing the proposal, has said that the responsibilities of the government and regulators should be clearly demarcated to ensure harmonious relations between them. The regulators should take responsibility for their actions and their autonomy should be protected, the ministry feels.

The ministry also wants to ensure that any government intervention in the functioning of a regulator should be done in a transparent manner in public interest. The finance ministry also noted that the Planning Commission was formulating a policy on ‘Prudent regulatory philosophy for implementation across sectors’, and this could be a significant input for the discussion on making regulators answerable to Parliament.

The Planning Commission’s view is that regulators could be asked to submit an annual report to Parliament, listing out the regulatory approach for the coming year and its targeted outcome. Besides, a report on the performance could be submitted at the end of each year. The commission has also cited the UK experience through the Regulatory Reform Committee in the House of Commons and the Delegated Powers and Regulatory Reform Committee in the House of Lords as a precedent for the ongoing discussion.