When Indian regulators
function like a court, they release detailed orders. So, the Competition Commission of India (CCI), Sebi, Telecom Regulatory Authority of India (Trai) or Central Electricity Regulatory Commission (Cerc) release orders passed on various entities. They also release comments received from the public on draft notifications put up on their websites. What they often do not release, are minutes of meeting. But as experts said, this is where a lot of decisions get made.
“Clarity and transparency on what is expected from regulators are crucial. The regulator need to be proactive in identifying the practical steps that will be taken to meet these expectations, including through publicly available corporate and strategic plans that detail in a clear and intelligible way, what operational modalities and resources the regulators will use to meet these expectations,” says an OECD note on governance of regulators.
As it says, if the lights go out, tap water stops running, trains break down or phones stop working, the public must feel confident that the regulators have been seen to be proactive. Bare statements may not be enough.
It is in this context that India’s Financial Sector and Legislative Reforms Commission had noted that regulators must show the costs and benefits of their action. It was also flagged by the committee headed by Parthasarathi Shome on General Anti-Avoidance Rules, as a recommendation for the tax departments. It had suggested that any tax changes sought through Parliament must be accompanied by a cost-and-benefit analysis, which should be made public. The effect, as Shome noted, would be fewer incentives for the department to make too many changes.
None of the Indian regulators puts this maxim of demonstrating cost and benefits, in its disclosures. Not even Sebi, which is the only one that puts its agenda board for consideration on its website. Putting agendas on websites is a practice that neither Irdai
follows. Nor do Trai or CERC. “Putting up the agenda on the website is a good idea,” said Rahul Khullar, former chairman, Trai. But he was not sure if minutes of meeting would help transparency if they were put up for public disclosure. “I would suggest an explanatory memorandum to explain the details. The minutes, which are drafted by bureaucrats, hide more than they reveal,” he said.
Writing on the subject, economists Vijay Kelkar and Ajay Shah note in their book, In Service of the Republic, that the rise in demand for transparency runs parallel with the demands to restrict executive decision making to simple rule-based systems. “India has reached a point in its trajectory where the executive discretion that was normal and acceptable from the 1970s to the 1990s is now seen as illegitimate and will run into trouble.” They quote in this context the example of how the Trai decision to penalise companies for call drops was struck down by the Supreme Court as non-transparent. “Such a decision would probably not have emanated from the Supreme Court in previous decades,” the authors say.