2.10. Regulatory Coherence in India

A robust overarching regulatory philosophy/framework is needed for coordinated development of the economy and its constituent sectors However, Political constraints and government preferences seem to have dominated the reform agenda.

More than twenty years of independent regulation in India have been characterized by the government’s inability to create and follow a cogent and coherent approach to independent regulation.

At the state level, Bureau of Industrial Promotion (BIP) works as a nodal agency to provide regulatory coherence, i.e. it is the nodal agency for expediting clearance of private sector projects. Being a nodal agency, it interacts with all the regulatory bodies at the state level and tries to ensure coherence among them. But in practice it has not been very effective.

Overall regulatory coherence may be improved by making the following institutional arrangements:

♤ Sector specific apex bodies need to be established at the Centre. These bodies should be complemented by a well-endowed economy wide regulatory and competition authority in each state.

♤ An appellate tribunal for all appeals against sector regulators needs to be established. If the workload increases in any one sector, these can be hived off.

♤ Interface between regulators and the Competition Commission needs to be formalized in legal terms so that there is no conflict between them and impugned parties do not take advantage of the same.

♤ Multi-stakeholder participation should be the way forward, which can effectively take care of several concerns with regard to regulatory efficacy and accountability. Consumer organizations need to be strengthened with resources so that they can be effective advocates.