GOVERNANCE

Regulatory Bodies in India

by LotusAriseNovember 27, 20220 Comments

Regulatory bodies are a set of organizations set up by the government to monitor, guide,
and control various sectors such as banking, insurance, education or healthcare. In India, each
industry has its own regulating body. They may or may not be under direct executive
supervision. The FSSAI is in charge of food safety, just as the RBI is in charge of market inflation.
Some other examples of regulatory bodies include Securities and Exchange Board of India
(SEBI), Competition Commission of India (CCI), Small Industries Development Bank of India
(SIDBI), etc.

Regulatory Body
Role of government as a provider and distributor of goods and services or controller of
law and order has been supplanted by many other regulating roles. Changing economic
and social complexity demands an increasingly better form of governance, which can be not
regulated by traditional form of government alone. Hence, many new regulatory bodies are
required to compliment the regulatory functions of conventional government.
In India, constitution empowers state or central legislature to frame laws, in order to
devolve regulating power to autonomous institutions. Article 19 of constitution
empowers legislature to frame laws, with the inkling of “reasonable restrictions”.
These provisions provide the broad set of power to legislating bodies to establish organic
regulating bodies. The Constitution as well as the laws enacted by Parliament has established
the institutions and mechanisms to enforce the laws and rules. Article 53(1) of the
Constitution regulates the exercise of the executive powers of the Union. Further,
Article 53(3) authorizes the Parliament to confer by law such functions to ‘authorities’.
The regulator acts like a mini-state in that it exercises legislative powers in the form of
drafting regulations that are binding on regulated entities; it acts as the executive in its
supervision and enforcement actions; and it performs a quasi-judicial function while assessing
compliance with the law by regulated entities and compliance of processes by the regulator
while imposing penalties on them.
Regulatory agencies are remarkable in featuring a combination of regulation-making
power that is delegated by Parliament, executive functions, and quasi-judicial
functions. In addition, there are sound reasons for favouring significant political and
operational independence in regulatory agencies. In order to obtain sound outcomes, clearly
established un-conflicted objectives, processes governing legislative and executive functions,
bringing in an element of separation of powers for performing quasi judicial functions and
establishing an effective specialised mechanism for substantive judicial review of regulations
and orders are required.

Functions of Regulatory Bodies

The regulatory body’s key functions are usually listed as follows:
1. Corrective actions
2. Regulations and guides
3. Review and assessment
4. Enforcement
5. Licensing
6. Inspection
7. Ensure free and fair market, especially after liberalization
8. Provides functional autonomy to private investment and shielding them from interference

Role of Regulatory Bodies

India liberalised industries in the 1990s and handed over sectoral governance to regulatory
bodies. These bodies played a constructive role in ensuring the free and fair market.
 Post 1990, Privatisation saw the advent of the ‘Indian Regulator’ that became the ‘nurturer’
and ‘parent’ of its sector. The regulators incentivised private investment by giving them
functional autonomy and shielding them from interference.
Also, regulatory bodies have shown that empowered regulator can bring fruitful results:
Steps taken by Reserve Bank of India (RBI) in tackling the liquidity crisis and
management of increasing Non- Performing Assets (NPAs).
SEBI has also been instrumental in taking quick and effective steps in light of the global
meltdown and the Satyam fiasco.
However, improper regulation or failure of regulatory bodies in smoothening the interaction
between markets and the State may lead to a new crisis. For example,
AGR issue: In October 2019, the Supreme Court demanded that telecom companies
pay statutory dues worth ₹1.47 lakh crore to the central government.
These dues didn’t pile up overnight but stem from a 15-year-old dispute over sharing of
revenues between telcos and the government. A well-regulated industry would not be
subject to such a large fiscal shock.

Types of Regulation and Regulatory Bodies

Type of Regulation
Economic regulation: Aims to prevent market failure through various markets distorting
behaviour.
Environmental regulation: In India environmental protection is a constitutional demand
(FR’s, DPSP and FD’s). Aim is to protect environment from harm.
Regulation in public interests: Wider section of protection, where target is more towards
the quality of services and product.

Types of Regulatory Bodies

Statutory Independent Regulatory Agencies: Unlike the conventional agencies controlled
by government department or acting as government agencies, these are unattached to
executive faction of government. Although there is not absolute autonomy, but still they enjoy
a wide spectrum of autonomous power. Its need arose from the requirement of ensuring level
playing field in laissez faire state of economy and also to ensure wider public interests. This
form of institution was started in USA and there from spread to entire world.
Self-Regulatory Authorities: These are created under different laws and are self-regulatory.
Example -Press Council of India.

Issues with Regulatory Bodies

Transparency: Stakeholders are barely apprised of existence of any such laws and if at all
they know the law, it is written in so complicated manner, using law jargons that it hardly
makes sense to layman people. Some laws inherently make provisions for promoting
transparency but they are ill implemented, thus diluting its significance.
Independence: Efficiency of the regulatory bodies can be ensured only if it is not controlled
or interfered. This can be ensured only when it has financial resources and administrative
freedom (fixed tenure, appointment or posting decisions). If it’s a delegated independence
and not a mandated one, it becomes largely a nominal force and minimises the real power of
intuitions.
Accountability: In absence of proper accountability, institution may either turn out to be
corrupt or unfair. Also, it reduces the chance of impartiality and efficiency. In order to maintain
the accountability, political and legal mechanism has to be ensured. Parliamentary
mechanisms form one of the most effective means to ensure accountability. Some of the
common methods used to ensure accountability are:
Statute itself provides certain guidelines for ensuring accountability.
Audit by CAG.
Mandatory annual report.
Appellant bodies.
Populist pressure: In India, political populism frequently takes precedence over economic
concerns. This puts a pall over the rule of law. The ruling political parties constantly interfere
with the functioning of regulatory entities, such as the government’s intervention in the RBI’s
operations.
Ineffective review system: Under the auspices of legislative committees, the review
mechanism for the functioning of regulatory organizations is not very robust.
 Selection of non-experts: The appointment of non-experts to lead regulatory organizations
may result in inefficiency in their operations. When the former Finance Secretary was named
Chairman of the Reserve Bank of India, this issue arose.
Overlapping of Powers – The presence of numerous regulatory organizations results in
power overlapping. For example:
Environment- Central Pollution Control Board (CPCB) and National GreenTribunal
(NGT).
Controversy between SEBI and IRDAI over Unit Linked Insurance Policy.
Education sector- All India Council for Technical Education (AICTE) and University
Grants Commission (UGC).

Important Regulatory Bodies

Reserve Bank of India
Securities and Exchange Board of India
Insurance Regulatory and Development Authority
Competition Commission of India
Telecom Regulatory Authority of India
Petroleum and Natural Gas Regulatory Board
Central Electricity Regulatory Commission
Forward Markets Commission
Atomic Energy Regulatory Board
Central Silk Board
Central Pollution Control Board
Pharmacy Council of India
Dental Council of India
Veterinary Council of India
Central Council of Indian Medicine
Indian Nursing Council
Central Council of Homoeopathy
National Rain-fed Area Authority
Inland Waterways Authority of India
Central Ground Water Authority
Directorate General of Civil Aviation
Airports Economic Regulatory Authority of India
Pension Fund Regulatory and Development Authority
Food Safety and Standards Authority of India
Bar Council of India
University Grants Commission
Financial Stability and Development Council
All India Council for Technical Education
Bureau of Energy Efficiency
National Green Tribunal
Advertising standards council of India
Food Safety and Standards Authority of India

Reserve Bank of India

Since its inception, the Reserve Bank of India has undertaken the traditional central banking
function of
managing the government’s banking transactions. The Reserve Bank of India Act, 1934
requires the Central Government to entrust the Reserve Bank with all its money,
remittance, exchange and banking transactions in India and the management of its public
debt. The Reserve Bank is fully owned and operated by the Government of India. The Preamble
of the Reserve Bank of India describes the basic functions of the Reserve Bank as:
Regulating the issue of Bank notes.
 Securing monetary stability in India.
Modernising the monetary policy framework to meet economic challenges.

Main Functions
Monetary Authority:
Formulates, implements and monitors the monetary policy.
Objective: maintaining price stability while keeping in mind the objective of growth.
Regulator and supervisor of the financial system:
Prescribes broad parameters of banking operations within which the country’s banking and
financial system functions.
Objective: maintain public confidence in the system, protect depositors’ interest and provide
cost effective banking services to the public.
Manager of Foreign Exchange
Manages the Foreign Exchange Management Act, 1999.
Objective: to facilitate external trade and payment and promote orderly development and
maintenance of foreign exchange market in India.
Issuer of currency:
Issues and exchanges or destroys currency and coins not fit for circulation.
Objective: to give the public adequate quantity of supplies of currency notes and coins and in
good quality.
Developmental role
Performs a wide range of promotional functions to support national objectives.
Regulator and Supervisor of Payment and Settlement Systems:
Introduces and upgrades safe and efficient modes of payment systems in the country to meet
the requirements of the public at large.
Objective: maintain public confidence in payment and settlement system
Related Functions:
Banker to the Government: performs merchant banking function for the central and the state
governments: also acts as their banker.
Banker to banks: maintains banking accounts of all scheduled banks
Management of Public Debt:
The Reserve Bank manages public debt on behalf of the Central and the State Governments.
It involves issue of new rupee loans, payment of interest and repayment of these loans and
other operational matters such as debt certificates and their registration.

Acts Administered by Reserve Bank of India

Reserve Bank of India Act, 1934
Public Debt Act, 1944/Government Securities Act, 2006
Government Securities Regulations, 2007
Banking Regulation Act, 1949
Foreign Exchange Management Act, 1999
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (Chapter II)
Credit Information Companies(Regulation) Act, 2005
Payment and Settlement Systems Act, 2007

Bimal Jalan Committee

The Central Board of Reserve Bank of India decided to transfer a surplus of Rs. 1,23,414 Cr
and Rs. 52,637 crore of excess provisions made over the years. This mark the first time the
RBI will be paying out such a huge amount. The Government had budgeted for Rs. 90,000
crore from RBI. RBI transfers its surplus annually to the Government after making adequate
provisions for contingencies or potential losses. For the past four years, it averaged Rs.
50,000 Cr.
RBI was promoted as a private shareholders bank in 1935 with a paid-up capital of Rs. 5 Cr,
the Government nationalized it in January 1949, making the sovereign the owner. Under
Section 47 of the RBI Act, “after making provision for bad and doubtful debts, depreciation in
assets, contributions to staff and superannuation funds, the balance of the profits shall be
paid to the Central Government”. The money is transferred to the Consolidated Fund of India.
The windfall gain can lead to a lower fiscal deficit. Otherwise, Government can spend this
 money on capital assets so that the capital expenditure can increase. Major
recommendations of Bimal Jalan Committee in this regard are as follows:
Allowable
Only realised equity built from profits must be distributed.
The panel recommended that the Contingency Fund be maintained within a range of 5.5% to
6.5% of RBI’s balance sheet.
Hence, the excess from the pre-decided 5.5% level or Rs. 52 ,637 Or has been written back,
that is transferred to the Centre.
Not Allowable
Revaluation gains from market fluctuations on foreign currency, gold or other assets must be
retained. Revaluation balances were not distributable.
Hence bulk of RBI’s legacy reserves are ring-fenced from transfer demands.
Salient features of Bimal Jalan Committee Report:
It suggested that the framework may be periodically reviewed after every five years.
If there is significant change in the RBI’s risks and operating environment, an intermediate
review may be considered.
It recommended to align the central bank’s accounting year with the financial year, which
could reduce the need for paying interim dividend.
The panel recommended clear distinction between the two components of economic capital,
realised equity and revaluation balances. This is because of the volatile nature of the
revaluation reserves.
The Committee also said, even if the RBI’s economic capital could appear to be relatively higher, it
is largely on account of the revaluation balances, which cannot be distributable to the Centre.

Securities and Exchange Board of India

The Securities and Exchange Board of India (SEBI) was established on April 12, 1992 in
accordance with the provisions of the Securities and Exchange Board of India Act,
1992.
Its objective is to protect the interests of investors in securities and to promote the
development of and to regulate the securities market.
It shall consist of a Board consisting of a Chairman.
Two members from amongst the officials of the of the Central Government dealing with
Finance and administration of the Companies Act. 1956.
One member from amongst the officials of the Reserve Bank.
Five other members of whom at least three shall be the whole-time members, to be
appointed by the Central Government.
The Central Government shall remove a member from office if he:
is or at any time has been adjudicated as insolvent;
is of unsound mind and stands so declared by a competent court;
Has been convicted of an offence which in the opinion of the Central Government
involves a moral turpitude;
Has in the opinion of the Central Government so abused his position as to render his
continuation in office detrimental to the public interest;
Provided that no member shall be removed, unless he has been given a reasonable
opportunity of being heard in the matter.
Subject to the provisions of this Act, it shall be the duty of the Board to protect the
interests of investors in securities and to promote the development of and to regulate
the securities market by such measures as it thinks fit.
Regulating the business in stock exchanges and any other securities markets;
Registering and regulating the working of stock brokers, sub-brokers, share transfer
agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant
bankers, underwriters, portfolio managers, investment advisers and such other
intermediaries who may be associated with securities markets in any manner;
Registering and regulating the working of (venture capital funds and collective investment
schemes) including mutual funds;
Promoting and regulating self-regulatory organisations;
Prohibiting fraudulent and unfair trade practices relating to securities markets;
Promoting investors education and training of intermediaries of securities markets;
 Prohibiting insider trading in securities;
Regulating substantial acquisition of shares and takeover of companies;
Calling for information from undertaking inspection, conducting inquiries and audits of the
stock exchanges, mutual funds, other persons associated with the securities market,
intermediaries and self-regulatory organisations in the securities market;
Calling for information and records from any person including any bank or any other
authority or board or corporation established or constituted by or under any Central or
State Act which, in the opinion of the Board, shall be relevant to any investigation or
inquiry by the Board in respect of any transaction in securities;
Calling for information from, or furnishing information to, other authorities, whether in
India or outside India, having functions similar to those of the Board, in the matters
relating to the prevention or detection of violations in respect of securities laws, subject to
the provisions of other laws for the time being in force in this regard;
Performing such functions and exercising such powers under the provisions of the
Securities Contracts (Regulation) Act. 1956 (42 of 1956), as may be delegated to it by
the Central Government.
Levying fees or other charges for carrying out the purposes of this section;
Conducting research for the above purposes.
SEBI-FMC merger:
SEBI was set up in 1988 as a non-statutory body for regulating the securities markets,
while it became an autonomous body in 1992 with fully independent powers. Forward
Markets Commission, on the other hand, had been regulating commodities markets since
1953.
The Government opted for merger of the two regulators since both commodity
derivatives and security derivatives have similar economic purposes of hedging, efficient
price discovery and risk management and have close resemblance in so far as trade
practices and mechanisms are concerned.
FMC’s merger with SEBI is aimed at streamlining the regulations and curb wild
speculations in the commodities market, while facilitating further growth.
SEBI has created a separate Commodity Cell and has set up new departments for
regulation of commodities derivatives market. An internal committee was earlier set up at
SEBI to evaluate and suggest regulatory changes for merger and prepare a roadmap for
the s

Proposed Amendments to SEBI Act and Autonomy

Proposed Amendments
The Govt, proposed amendments to the SEBI Act through Finance Bill, 2019.
It states, SEBI would constitute a Reserve Fund and 25% of the annual surplus of the
General Fund would be put in the Reserve Fund.
The size of such Reserve Fund cannot exceed the total of annual expenditure of the
preceding 2 financial years.
The surplus of the General Fund after factoring in all the SEBI expenses and the transfer to
the Reserve Fund needs to be transferred to the Consolidated Fund of India.
The proposal is also to seek, Govt, approval for capital expenditure, which can range from:
Setting up IT infrastructure.
Expanding the organisational capacity.
Any other physical or soft infrastructure.
Increasing its employees’ strength.
General Fund of SEBI
The General Fund of SEBI is over Rs. 3,000 Cr.
It is used to meet the expenses of a regulatory body including, salaries and allowances.
The fund gets money by the charges that SEBI levies on market participants in the form of
registration or processing fees.
Since inception, SEBI is subjected to CAG audit, not a single instance of financial imprudence
is observed.
Incidentally, all the penalties levied by the SEBI already go to the Consolidated Fund of India
(CFI). Similarly , settlement amounts are also credited to the CFI.
Centre Plans to give more Powers to Finance Ministry
Centre thinks that it can do a better job of regulating the economy by consolidating all existing
power under the Finance Ministry.
 But, such centralisation of powers will be risky.
Regulatory agencies, such as SEBI needs to be given full powers over their assets. They
should be made accountable to the Parliament.
If the powers are subsumed by the Centre, it will certainly affect their credibility.
Reasons for Opposition to the Amendments to SEBI Act through the Finance Bill
Employees’ Association says, the proposal is regressive, since SEBI does not have any
mandate to raise revenue for the Govt.
SEBI Chairman said, they are against the spirit of the SEBI Act.
It will affect autonomy of a regulatory institution like SEBI, which negatively impacts its ability
to function effectively towards its stated objectives and also hampering the progress of
securities market.
A regulatory agency that is at the mercy of the Centre to run financial and administrative
operations cannot be truly independent.
The lack of financial autonomy can affect SEBI’s plans to improve the quality of its operations
by investing in new technologies and other requirements to upgrade market infrastructure.
The requirement of Government approval for capital expenditure would rather slow down
decision-making and would be contrary to the principle of minimum Government, maximum
governance.
This can affect the health of India’s financial markets in the long run.

Insurance Regulatory and Development Authority (IRDA)

The Insurance Regulatory and Development Authority of India or the IRDAI is the apex body
responsible for regulating and developing the insurance industry in India. It is
an autonomous body. It was established by an act of Parliament known as the Insurance
Regulatory and Development Authority Act, 1999. Hence, it is a statutory body.
Objectives:
To protect the interest of and secure fair treatment to policyholders;
To bring about speedy and orderly growth of the insurance industry (including annuity
and superannuation payments) for the benefit of the common man and to provide long
term funds for accelerating growth of the economy;
To set, promote, monitor and enforce high standards of integrity, financial soundness, fair
dealing and competence of those it regulates;
To ensure speedy settlement of genuine claims, to prevent insurance frauds and other
malpractices and put in place effective grievance redressal machinery;
To promote fairness, transparency and orderly conduct in financial markets dealing with
insurance and build a reliable management information system to enforce high standards
of financial soundness amongst market players;
To take action where such standards are inadequate or ineffectively enforced;
To bring about optimum amount of self-regulation in day-to-day working of the industry
consistent with the requirements of prudential regulation.
Insurance Laws (Amendment) act, 2015 will remove archaic and redundant provisions in
the legislations and incorporates certain provisions to provide Insurance Regulatory and
Development Authority of India (IRDAI) with the flexibility to discharge its functions more
effectively and efficiently. It also provides for enhancement of the foreign investment cap in an
Indian Insurance Company from 26% to an explicitly composite limit of 49% with the
safeguard of Indian ownership and control.
Capital Availability: In addition to the provisions for enhanced foreign equity, the amended
law will enable capital raising through new and innovative instruments under the regulatory
supervision of IRDAI.
Empowerment of IRDAI: The Act will entrust responsibility of appointing insurance agents to
insurers and provides for IRDAI to regulate their eligibility, qualifications and other aspects. It
enables agents to work more broadly across companies in various business categories; with
the safeguard that conflict of interest would not be allowed by IRDAI through suitable
regulations. IRDAI is empowered to regulate key aspects of Insurance Company operations
in areas like solvency, investments, expenses and commissions and to formulate regulations
for payment of commission and control of management expenses. It empowers the Authority
to regulate the functions, code of conduct, etc, of surveyors and loss assessors. It also
expands the scope of insurance intermediaries to include insurance brokers, re-insurance
brokers, insurance consultants, corporate agents, third party administrators , surveyors and
loss assessors and such other entities, as may be notified by the Authority from time to time.
 Further, properties in India can now be insured with a foreign insurer with prior permission
of IRDAI; which was earlier to be done with the approval of the Central Government.
Promoting Reinsurance Business in India: The amended law enables foreign reinsurers to
set up branches in India and defines ‘re-insurance’ to mean “the insurance of part of one
insurer’s risk by another insurer who accepts the risk for a mutually acceptable premium”, and
thereby excludes the possibility of 100% ceding of risk to a re-insurer, which could lead to
companies acting as front companies for other insurers. Further, it enables Lloyds and its
members to operate in India through setting up of branches for the purpose of reinsurance
business or as investors in an Indian Insurance Company within the 49% cap.
Robust Appellate Process: Appeals against the orders of IRDAI are to be preferred to SAT
as the amended Law provides for any insurer or insurance intermediary aggrieved by any
order made by IRDAI to prefer an appeal to the Securities Appellate Tribunal (SAT).

Competition Commission of India

The Competition Commission of India (CCI) was established in 2003 under the
Competition Act. 2002, with the objective of eliminating practices having an adverse
effect competition, promoting and sustaining competition, protecting the interest of
consumers and ensuring freedom of trade in India.
The Competition Act, 2002 was enacted in 2003 as a modern economic law and the Act has
since been amended thrice in the years 2007, 2009 and 2017.
In 2002, amendments relating to anti-competitive agreements were brought and abuses of
dominant position were brought into force from May, 2009 and those relating to combinations
from 2011.
The Amendment of 2007 provided for two separate institutions namely, a quasi-judicial body
i.e., the Competition Commission of India (the Commission) for the administration of the Act
and the Competition Appellate Tribunal (COMPAT) to hear and dispose of appeals against
any direction issued or decision made or order passed by the Commission. Pursuant to the
amendment of 2009, all pending cases and pending investigations with MRTP Commission
were transferred to COMPAT and CCI respectively and the MRTP Act was repealed. An
amendment was effected to the Act in 2017, vide Finance Act. 2017, and the National
Company Law Appellate Tribunal (NCLAT) became the appellate tribunal in place of erstwhile
COMPAT since 26th May, 2017.
Its objectives are:
Preventing practices having adverse effect on competition,
Promoting and sustaining competition in markets,
Protecting the interests of consumers, and
Ensuring freedom of trade carried on by other participants in markets in India.
The Commission got its enforcement and regulatory power after the substantive provisions of
the Act relating to anti-trust enforcement and regulation of combinations came into force in the
years 2009 and 2011 respectively.
The substantive provisions of the Act namely, Anticompetitive agreements (Section 3) and
Abuse of dominant position (Section 4) came into force with effect from May 20, 2009. The
provisions relating to ‘Regulation of Combinations’ (sections 5 and 6) came into force on June
01, 2011. Anti-competitive agreements and abuse of dominance are considered as potential
impediments to free and fair competition in the markets and penalty is imposed wherever the
Commission concludes that the enterprise has/ had indulged in anti-competitive practices
resulting in Appreciable Adverse Effect on Competition. Regulation of combinations aim at ex-
ante screening of mergers, amalgamations and acquisition of control for any possible anti-
competitive effects.
Under Section 49 of the Act the Commission is mandated to undertake competition advocacy.
Competition advocacy is about sensitizing the market players and other market participants
on the nuances of competition law; and creating awareness and imparting training about the
benefits of competition to the stakeholders. Under Section 49(1) of the Act the Central or the
State Governments may make reference of any policy to the Commission for its opinion on
matter related to competition. Similarly, the Act also provides for a reference by/to Statutory
Authorities (Regulatory Institutions) under Sections 21 and 21A of the Act.

The Competition Law Review Committee

The Competition Law Review Committee under the Chairmanship of Mr. Injeti Srinivas submitted
its report to the Ministry of Corporate Affairs on July 26, 2019 recommending amendments to the
Competition Act, 2002.
 Governing body: The Act is to be amended to provide for a governing body, to strengthen
the accountability of the Competition Commission of India. The governing body will consist of
a Chairperson, six whole time members, and six part-time members. It will perform quasi-
legislative functions, drive policy decisions, and perform a supervisory role.
Investigation:Under the Act, the Director General (DG) conducts inquiries into violations of
the Act. To improve administrative efficiency, the committee recommended that the office of
the DG be subsumed within the CCI.
Appellate Authority: Under the Act, appeals against orders of the CCI are heard by the
National Company Law Appellate Tribunal. The Act requires speedy disposal of such appeals,
preferably, within a period of six months. However, the Committee noted that the Tribunal is
overburdened with cases. Therefore, a dedicated bench should be created to hear appeals
under the Act.
Speedy Resolution: The committee recommended that the Act be amended to empower CCI
to allow settlements and commitments for certain types of anti-competitive agreements (like
exclusive supply agreements) and for abuse of dominance.
Greenchannelnotifications:Underthe Act, combinations beyond a certain threshold require
the approval of CCI. The Committee recommended a ‘green channel’ route for automatic
approval of CCI for specific merger and acquisition cases, where there are no major concerns
of an appreciable adverse effect on competition.
Material influence for determining control: The Act regulates combinations through
methods such as mergers or amalgamations of two enterprises, or through acquisition of
shares, voting rights or control over an enterprise. The Committee recommended introducing
a ‘material influence’ standard to determine what amounts to ‘control’.
Time limits for merger assessment: The Combination regulations notified under the Act
require the CCI to provide its preliminary opinion on whether the combination will have an
appreciable adverse effect on competition, within 30 days. The Committee recommended that
the Act be amended to include this timeline for all combinations (except for green channel
combinations).
Hub and spoke cartels: The Act does not directly address cartels where a third party (a
‘hub’) facilitates collusion between two or more competitors (the ‘spokes’) by causing sharing
of sensitive information between them. It recommended amendments to the Act to include
liability of such hubs.
Penalties:The Committee noted that the rate of recovery of penalties under the Act is low
because several CCI orders are challenged before courts. The Committee recommended that
CCI should be mandated to issue guidance on calculation and imposition of penalties under
the Act.

Telecom Regulatory Authority of India (TRAI)

The Telecom Regulatory Authority of India (TRAI) was established under the Telecom
Regulatory Authority of India Act, 1997 to regulate the telecommunication services. Its
establishment was considered necessary in the context of liberalisation and private sector
participation in the telecom sector and to provide a level playing field for all operators.
The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a
Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the
adjudicatory and disputes functions from TRAI. TDSAT was set up to adjudicate any dispute
between a licensor and a licensee, between two or more service providers, between a service
provider and a group of consumers and to hear and dispose of appeals against any direction,
decision or order of TRA .
TRAI’s mission is to create and nurture conditions for growth of telecommunications in the
country in a manner and at a pace which will enable India to play a leading role in emerging
global information society.
One of the main objectives of TRAI is to provide a fair and transparent policy environment
which promotes a level playing field and facilitates fair competition.
Its functions can be broadly summarised as:
Make recommendations, either suo motu or on a request from the licensor, on the
following matters, namely;
Need and timing for introduction of new service provider;
Terms and conditions of licence to a service provider;
Revocation of licence for non-compliance of terms and
Conditions of licence;
 Measures to facilitate competition and promote efficiency
In the operation of telecommunication services so as to facilitate growth in such services;
Technological improvement in the services provided by the service providers;
Type of equipment to be used by the service providers after inspection of equipment
used in the network;
Measures for the development of telecommunication technology and any other matter
relatable to telecommunication industry in general;
Efficient management of available spectrum;
Fix the terms and conditions of inter-connectivity between the service providers;
Levy fees and other charges at such rates and in respect of such services as may be
determined by Regulations;
Perform such other functions including such administrative and financial functions as
may be entrusted to it by the Central Government or as may be necessary to carry out
the provisions of this Act.

The Central Electricity Regulatory Commission (CERC)

It is a statutory body functioning under the Electricity Act, 2003. It was
initially constituted under the Electricity Regulatory Commissions Act, 1998.
The CERC intends to promote competition, efficiency and economy in bulk power markets,
improve the quality of supply, promote investments and advise the Government on the
removal of institutional barriers to bridge the demand supply gap and thus foster the interests
of consumers.
Its functions are:
To regulate the tariff of generating companies owned or controlled by the Central
Government
To regulate the tariff of generating companies other than those owned or controlled by
the Central Government
To regulate the inter-state transmission of electricity
To determine tariff for inter-state transmission of electricity and
To issue licenses to persons to function as transmission licensee and electricity trader
with respect to their inter-state operations.

The Medical Council of India (MCI)

The Medical Council of India was a statutory body for establishing uniform and high
standards of medical education in India until its dissolution on 25 September 2020 when it
was replaced by National Medical Commission.
It was established in 1934 under the Indian Medical Council Act, 1933, now
repealed, with the main function of establishing uniform standards of higher
qualifications in medicine and recognition of medical qualifications in India and abroad.
The number of medical colleges had increased steadily during the years after
Independence. It was felt that the provisions of Indian Medical Council Act were not
adequate to meet with the challenges posed by the very fast development and the
progress of medical education in the country. As a result, in 1956, the old Act was
repealed and a new one was enacted. This was further modified in 1964, 1993 and
2001.
The objectives of the Commission are as follows:
Maintenance of uniform standards of medical education both undergraduate and
postgraduate.
Recommendation for recognition/de-recognition of medical qualifications of medical
institutions of India or foreign countries.
Permanent registration/provisional registration of doctors with recognized medical
qualifications.
Reciprocity with foreign countries in the matter of mutual recognition of medical
qualifications.
The Pension Fund Regulatory & Development Authority
1. In 2003, Interim Pension Fund Regulatory & Development Authority (PFRDA) was
established through a resolution by the Government of India to promote develop and regulate
pension sector in India. In 2013, it was made a statutory body and the same was notified
in 2014.
2. PFRDA is regulating National Pension System (NPS), subscribed by employees of
Govt, of India, State Governments and by employees of private
institutions/organizations & unorganized sectors. The PFRDA is ensuring the orderly
growth and development of pension market.
3. Section 14 of the PFRDA Act, 2013 lays down the duties, powers and functions of the
Authority:
to regulate, promote and ensure orderly growth of the National Pension System and
pension schemes,
to protect the interests of subscribers of such system and schemes,
to be a model Regulator for promotion and development of an organized pension system
to serve the old age income needs of people on a sustainable basis.

Enforcement Directorate
Directorate of Enforcement is a Multi-Disciplinary Organization mandated with the task
of enforcing the provisions of two special fiscal laws – Foreign Exchange Management
Act, 1999 (FEMA) and Prevention of Money Laundering Act, 2002 (PMLA).
Besides directly recruiting personnel, the Directorate also draws officers from different
Investigating Agencies, viz. Customs & Central Excise. Income Tax. Police, etc., on
deputation.
With the onset of the process of economic liberalization FERA 1973, which was a regulatory
law was repealed and in its place, effective 1st June, 2000 a new law – Foreign Exchange
Management Act, 1999 (FEMA) came into operation. Further, in tune with the International
Anti Money Laundering regime. Prevention of Money Laundering Act, 2002 (PMLA) was
enacted and entrusted for its enforcement to the Directorate, w.e.f 01-07-2005.
Carved in the role of a multi-dimensional Organisation, the Directorate enforces two laws;
FEMA , a Civil Law having quasi-judicial powers, for investigating suspected contraventions of
the Exchange Control Laws and Regulations with the powers to impose penalties on those
adjudged guilty and PMLA, a Criminal Law, whereby the Officers are empowered to conduct
enquiries to locate, provisionally attach/ confiscate assets derived from acts of Schedules
Offences besides arresting and prosecuting the Money Launderers.
The main functions of the Directorate are as under
Investigate contraventions of the provisions of Foreign Exchange Management Act, 1999
(FEMA) which came into force with effect from 1-6-2000. Contraventions of FEMA are
dealt with by way of adjudication by designated authorities of ED and penalties upto
three times the sum involved can be imposed.
Investigate offences of money laundering under the provisions of Prevention of Money
Laundering Act, 2002 (PMLA) which came into force with effect from 1-7-2005 and to
take actions of attachment and confiscation of property if the same is determined to be
proceeds of crime derived from a Scheduled Offence under PMLA, and to prosecute the
persons involved in the offence of money laundering. There are 156 offences under 28
statutes which are Scheduled Offences under PMLA.
Adjudicate Show Cause Notices issued under the repealed Foreign Exchange
Regulation Act, 1973 (FERA) up to 31-5-2002 for the alleged contraventions of the Act
which may result in imposition of penalties. Pursue prosecutions launched under FERA in
the concerned courts.
Sponsor cases of preventive detention under Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act, 1974 (COFEPOSA) in regard to contraventions of
FEMA.
Render cooperation to foreign countries in matters relating to money laundering and
restitution of assets under the provisions of PMLA and to seek cooperation in such
matters.
Recommendations of Financial Sector Legislative Reform Commission (FSLRC)
Need for reform:
The legislative foundation of India’s financial sector is too complex and cumbersome.
These legislations, of which many are out dated – with occasional, piecemeal
amendment, do not provide a holistic framework for the harmonious development of the
financial sector there is an urgent need for an overhaul of the legislativeregulatory
framework of the financial sector.
The regulatory architecture is too fragmented, leaving substantial scope for grey areas
and overlaps, capture and bargaining.
The current architecture is not conducive enough for addressing the issuese manating
from the global context of financial development. Fragmented regulation and regulatory
responsibilities and lack of clarity would hinder both domestic and global co-ordination
efforts in addressing issues of contagion and global financial shocks. There is a need for
strengthening the fundamental architecture in addressing such issues as well as for
evolving a framework for dealing with systemic risk and resolution.
There is a need for strengthening the consumer protection and grievance redress
mechanism in the financial sector. This is particularly important given the low level of
financial literacy, low penetration of financial services, absence of clear regulatory
mandate on composite and complex products and on the roles of product distributors and
financial advisers. Given the complexity of these issues, the main focus was on the
necessity of placing consumer protection at the centre of the philosophy on financial
regulation. This issue needs to be addressed both from the preventive and curative
sides; by the regulators as well as the redress agency, respectively.
The current architecture encourages turf battles and conflicts of interest. This is a result
of the lack of clarity of functions of the various regulatory authorities as well as of
assigning conflicting functions to the same regulatory agency. Despite the explicit
development objectives given to the sector-specific regulators, market development has
been far from satisfactory as is evidenced in the time-frame on developing products and
systems such as in the corporate bond markets.
While every regulator should encourage competition in their sector, the ultimate
responsibility of managing economy-wide competition issues should be lead to the
Competition Commission. While this would help address many macro-level consumer
issues, such micro-level issues should be addressed by the sector specific regulators
and the grievance redress fora/forum. There should be greater and institutionalised,
interface between the Competition Commission and sectoral regulators in promoting
competition and competition practices and culture.
Key principles:
Accountability is best achieved when an agency has a clear purpose. The traditional
Indian notion, that a regulator has powers over a sector but lacks specific objectives and
accountability mechanisms is an unsatisfactory one.
Conflicts of interest in particular, direct conflicts of interest are harmful for accountability
and must be avoided.
A complete picture of firms A financial regulatory architecture that enables a
comprehensive.
View of complex multi-product firms and thus a full understanding of the risks that they
take is desirable.
Avoiding sectoral regulators When a financial regulator works on a sector, there is a
possibility of an alignment coming about between the goals of the sector (growth and
profitability) and the goals of the regulator. The regulator then tends to advocate policy
directions which are conducive for the growth of its sector. Such problems are less likely
to arise when a regulatory agency works towards an economic purpose such as
consumer protection across all or at least many sectors.
Economies of scale in Government agencies In India, there is a paucity of talent and
domain expertise in Government, and constructing a large number of agencies is
relatively difficult from a staffing perspective. It is efficient to place functions that require
correlated skills into a single agency.
Transition issues is useful to envision a full transition into a set of small and
implementable measures.
The Commission proposes a financial regulatory architecture financial regulatory
architecture featuring seven agencies. This proposal features seven agencies and is
hence not a ‘unified financial regulator’ proposal. The existing RBI will continue to exist,
though with modified functions:
The existing SEBI, FMC, IRDA and PFRDA will be merged into a new unified
agency.
The existing Securities Appellate Tribunal (SAT) will be subsumed into the FSAT.
 The existing Deposit Insurance and Credit Guarantee Corporation of India
(DICGC)will be subsumed into the Resolution Corporation.
A new Financial Redressal Agency (FRA) will be created.
A new Debt Management OICE will be created.
The existing FSDC will continue to exist, though with modified functions and a
statutory framework.
Following functions are proposed:
Reserve Bank of India: It is proposed that RBI will perform three functions; monetary
policy, regulation and supervision of banking in enforcing the proposed consumer
protection law and the proposed micro-prudential law, and regulation and supervision of
payment systems in enforcing these two laws.
Unified Financial Agency: The unified financial regulatory agency would implement the
consumer protection law and micro-prudential law for all financial firms other than
banking and payments. This would yield benefits in terms of economies of scope and
scale in the financial system; it would reduce the identification of the regulatory agency
with one sector; it would help address the difficulties of finding the appropriate talent in
Government agencies. This proposed unified financial regulatory agency would also take
over the work on organised financial trading from RBI in the areas connected with the
Bond-Currency Derivatives Nexus and from FMC for commodity futures, thus giving a
unification of all organised financial trading including equities, government bonds,
currencies, commodity futures and corporate bonds. The unification of regulation and
supervision of financial firms such as mutual funds, insurance companies and a diverse
array of firms which are not banks or payment providers, would yield consistent treatment
in consumer protection and micro-prudential regulation across all of them.
Financial Sector Appellate Tribunal: The present SAT will be subsumed in FSAT, which
will hear appeals against RBI for its regulatory functions, the unified financial agency,
decisions of the FRA and some elements of the work of the resolution corporation.
Resolution Corporation: The present DICGC will be subsumed into the Resolution
Corporation which will work across the financial system. Financial Redressal Agency:
The FRA is a new agency which will have to be created in implementing this financial
regulatory architecture. It will setup a nationwide machinery to become a one stop shop
where consumers can carry complaints against all financial firms.
Public Debt Management Agency: An independent debt management office is
envisioned.
Financial Stability and Development Council: Finally, the existing FSDC will become a
agency and have modified functions in the fields of systemic risk and development.

Bureau of Energy Efficiency (BEE)

The Government of India set up Bureau of Energy Efficiency (BEE), on 1st March 2002
under the provisions of the Energy Conservation Act, 2001. The mission of the Bureau of
Energy Efficiency is to assist in developing policies and strategies with a thrust on self-
regulation and market principles, within the overall framework of the Energy Conservation Act,
2001 with the primary objective of reducing energy intensity of the Indian economy.

Role of BEE
BEE co-ordinates with designated consumers, designated agencies and other organizations and
recognize, identify and utilize the existing resources and infrastructure, in performing the functions
assigned to it under the Energy Conservation Act. The Energy Conservation Act provides for
regulatory and promotional functions.

National Green Tribunal

 The National Green Tribunal has been established on 18.10.2010 under the National
Green Tribunal Act 2010 for effective and expeditious disposal of cases relating to
environmental protection and conservation of forests and other natural
resources including enforcement of any legal right relating to environment and giving relief
and compensation for damages to persons and property and for matters connected therewith
or incidental thereto. It is a specialized body equipped with the necessary expertise to handle
environmental disputes involving multi-disciplinary issues. The Tribunal shall not be bound by
the procedure laid down under the Code of Civil Procedure, 1908, but shall be guided by
principles of natural justice.
The Tribunal’s dedicated jurisdiction in environmental matters shall provide speedy
environmental justice and help reduce the burden of litigation in the higher courts. The
Tribunal is mandated to make and endeavour for disposal of applications or appeals finally
within 6 months of filing of the same. Initially, the NGT is proposed to be set up at five places
of sittings and will follow circuit procedure for making itself more accessible. New Delhi is the
Principal Place of Sitting of the Tribunal and Bhopal, Pune , Kolkata and Chennai shall be the
other four place of sitting of the Tribunal.

Press Council of India

Press Council is a mechanism for the Press to regulate itself . The raison d’etre of this
unique institution is rooted in the concept that in a democratic society the press needs at
once to be free and responsible. If the Press is to function effectively as the watchdog of public
interest, it must have a secure freedom of expression, unfettered and unhindered by any authority,
organised bodies or individuals. But, this claim to press freedom has legitimacy only if it is
exercised with a due sense of responsibility. The Press must, therefore, scrupulously adhere to
accepted norms of journalistic ethics and maintian high standards of professional conduct.
The Press Council of India was first constituted on 4th July, 1966 as an autonomous,
statutory, quasi-judicial body, with Shri Justice J R Mudholkar, then a Judge of the Supreme
Court , as Chairman. The Press Council Act, 1965, listed the following functions of the Council in
furtherance of its objects:
To help newspapers to maintain their independence.
To build up a code of conduct for newspapers and journalists in accordance with high
professional standards.
To ensure on the part of newspapers and journalists the maintenance of high standards of
public taste and foster a due sense of both the rights and responsibilities of citizenship.
To encourage the growth of a sense of responsibility and public service among all those
engaged in the profession of journalism.
To keep under review any development likely to restrict the supply and dissemination of news
of public interest and importance
To keep under review such cases of assistance received by any newspaper or news agency
in India from foreign sources, as are referred to it by the Central Government.

The Food Safety and Standards Authority of India (FSSAI)

The Food Safety and Standards Authority of India (FSSAI) has been established under Food
Safety and Standards , 2006 which consolidates various acts & orders that have hitherto handled
food related issues in various Ministries and Departments. FSSAI has been created for laying
down science based standards for articles of food and to regulate their manufacture, storage,
distribution, sale and import to ensure availability of safe and wholesome food for human
consumption.
Highlights of Food Safety and Standard Act, 2006
Various central Acts like Prevention of Food Adulteration Act,1954, Fruit Products Order,
1955, Meat Food Products Order,1973. Vegetable Oil Products (Control) Order, 1947,Edible
Oils Packaging (Regulation)Order 1988, Solvent Extracted Oil, DeOiled Meal and Edible
Flour (Control) Order, 1967, Milk and Milk Products Order, 1992 etc will be repealed after
commencement of FSS Act, 2006.
The Act also aims to establish a single reference point for all matters relating to food safety
and standards, by moving from multi- level, multi-departmental control to a single line of
command. To this effect, the Act establishes an independent statutory Authority – the Food
Safety and Standards Authority of India with head office at Delhi. Food Safety and Standards
Authority of India (FSSAI) and the State Food Safety Authorities shall enforce various
provisions of the Act.
Establishment of the Authority
Ministry of Health & Family Welfare, Government of India is the Administrative Ministry for the
implementation of FSSAI. The Chairperson and Chief Executive Officer of Food Safety and
Standards Authority of India (FSSAI) have already been appointed by Government of India. The
Chairperson is in the rank of Secretary to Government of India.

Functions
Framing of Regulations to lay down the Standards and guidelines in relation to articles of food
and specifying appropriate system of enforcing various standards thus notified.
Laying down mechanisms and guidelines for accreditation of certification bodies engaged in
certification of food safety management system for food businesses.
Laying down procedure and guidelines for accreditation of laboratories and notification of the
accredited laboratories.
To provide scientific advice and technical support to Central Government and State
Governments in the matters of framing the policy and rules in areas which have a direct or
indirect bearing of food safety and nutrition.
Collect and collate data regarding food consumption, incidence and prevalence of biological
risk, contaminants in food, residues of various, contaminants in foods products, identification
of emerging risks and introduction of rapid alert system.
Creating an information network across the country so that the public, consumers,
Panchayats etc receive rapid, reliable and objective information about food safety and issues
of concern.
Provide training programmes for persons who are involved or intend to get involved in food
businesses.
Contribute to the development of international technical standards for food, sanitary and
phytosanitary standards.
Promote general awareness about food safety and food standards.

Advertisement Standard Council of India (ASCI)

ASCI is a voluntary self-regulatory organization, registered as a not-for-profit company
under section 25 of the Indian Cos. Act. The sponsors of ASCI, who are its principal members,
are firms of considerable repute within Industry in India, and comprise Advertisers, Media,
Advertising Agencies and other professional/ancillary services connected with advertising practice.

Power of ASCI
ASCI’s role has been acclaimed by various agencies including the Government. However, it
lacked the force of legal recognition. The Government of India has at last, taken note of this
and by one stroke on 2nd August 2006 vide a notification in The Gazette of India: Extraordinary
{Part II -sec. 3(i)|, made sure that at least as far as TV Commercials go, they abide by ASCI code.
The amendment made in Cable Television Networks Rules, 1994 through a Notification dated
August 2nd, 2006 now states: “(9) No advertisement which violates the Code for Self-Regulation
in Advertising, as adopted by the Advertising Standards Council of India (ASCI), Mumbai for public
exhibition in India, from time to time, shall be carried in the cable service”

Key Recommendations
Regulation only where necessary .
Regulation to be effective .
Self-regulation is the best form of regulation.
Regulatory procedures to be simple transparent and citizen friendly.
Involving citizens groups, professional organizations in the regulation activities.
Besides general guidelines to direct the interaction between government departments and
regulatory bodies also chart out general guidelines outlining the general roles and objective of
regulator.
Need for greater uniformity in the terms of structure, appointment, tenure and removal of
various regulatory authorities.
Well qualified selection committee to select the candidate for appointment chairman and
board members.
Their tenure should be secure, so that they can perform their task independently and
without much pressure.
Parliamentary oversight through departmental standing parliamentary committee, will
ensure proper accountability.
The annual reports of the regulators should include a report on their performance of
independent regulator and should be update periodically.
Impact assessment by the external agency.