Wednesday, 8 January 2014

Regulating the Regulator

The new Regulatory Reform Bill will make TRAI much stronger giving it power to even license service providers and making it answerable direct to the Parliament.
To make infrastructure regulators such as the Telecom Regulatory Authority of India (Trai) and Central Electricity Regulatory Commission (CERC) autonomous, the central government has proposed making these directly answerable to Parliament. The government also has plans to grant licensing powers to all regulators in the infrastructure sector, be it electricity, telecom, posts, airports or highways.

The proposed Draft Regulatory Reform Bill, 2013 aims to make regulators across key infrastructure sectors accountable to the Parliament besides giving them power of licensing. The overall functioning of the regulator will be subject to scrutiny by the Parliament on a yearly basis. The move will bring uniformity in the functioning of the regulators.
The Prime Minister's Office gave its go-ahead to the bill last month. The bill is now up for consultation with various stakeholders including all Ministries and once it is finalised it may be taken up in Parliament during the budget session.
The bill also aims to monitor the functioning of a large number of regulatory authorities existing in the country in many key sectors such as electricity, oil and gas, coal, telecommunications and internet, broadcasting and cable television, posts, airports, ports, waterways, railways, mass rapid transit system, highways and water supply, and sanitation.
Powers of a Regulator
The Bill grants autonomy to all regulators to appoint their staff and even experts without seeking permission fr0m the ministry concerned and also ensures funds are transferred fr0m the Consolidated Fund of India.
The Bill will give financial autonomy to the regulator. Once approved, the entire budgetary allocation will have to be transferred by the ministry concerned to the regulator to ensure its financial autonomy.
Functioning of the Regulator
The Regulatory Reforms Bill 2013 says: "By the end of every fiscal, they will have to submit a report to Parliament on all they did last year and the agenda for next year. Their orders will also be open for debate in Parliament and clarifications can be sought not only fr0m Parliament but also fr0m various committees.
According to a Cabinet note on the draft regulatory reform Bill, the sector regulators will have to present an annual report to Parliament on their work and will also be legally accountable, empowering any aggrieved party to file an appeal against a regulator’s decision.
The Cabinet note, floated by the Planning Commission, has proposed fixed four-year tenure for members of the regulators and insulates their selection, appointment and removal fr0m any political or non-political interference.
Members of a regulatory body will be barred fr0m seeking re-appointment and also prohibited fr0m taking up any consultancy position or otherwise in any body, organisation or entity under the jurisdiction of the regulator concerned.
The basic function of all regulators will be to protect the interests of all consumers by ensuring quality of service and lowering of costs, promote competition, encourage market development and benchmark the licences granted by it or by any other with international standards.
The change will bring 13 Indian regulators (except those in the financial sector) in line with the rules of the UK and US. The regulators in the UK are accountable to the government, which reports to their Parliament, and regulators in the US report to the Congress. The reports should share details of enforcement orders, final or provisional decisions along with the status of compliance thereof, details of government directions given to the regulatory authority during that year. It should also include details on general survey of activities during the year of the advisory committee, and report on such other matters as the government may in consultation with the regulatory commission, fr0m time to time require.


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