Institutional autonomy of sectoral regulators is critical for ensuring credibility, transparency, and fair competition. In light of recent incidents, examine the issues pertaining to the independence and autonomy of regulatory bodies in India.

Issues

Ⓐ Independence

1. political appointment e.g SEBI
2. No own funding → depend on centre
3. Interference in decision making e.g finance Ministry in IRDAI.
4. Non-independence regarding appointment of staff and functions e.g RBI Recruitment by ministry

Ⓑ Autonomy (5) Government direction to bodies → Resignation of Urjit Patel in 2018 from RBI (6) Not allowed to take own decision (7) Overlapping of functions → IRDAI & SEBI on ULIPs

Ⓒ Other Issues (8) Fragmented Regulation (9) No uniform guidelines → Sector specific rules (10) proliferation of regulators → New regulators like TRAI, CCI, etc. (11) frequent changes in regulation → SEBI guidelines changes every 3-4 months

Way forward

Ⓐ Financial Sector Reform Committee

1. Unifed financial Regulator for all sector.
2. uniform regulation for ease of compliance

Ⓑ Other Reforms 3. Autonomy and independence of regulator. 4. Reducing government influence in appointment and decision 5. Merit Based selection for regulatory role 6. Specialised lateral entry for regulatory Role