NITI Aayog seeks law to regulate the regulators

  • Chetan Chauhan, Hindustan Times, New Delhi
  • Updated: Oct 08, 2015 01:18 IST
The port regulator is mandated to set tariffs only whereas the electricity sector regulators have much wider powers. (HT File Photo)

A new draft law recommends segregation of non-judicial and judicial work of regulators and stipulates criteria for selection of chairperson and members of regulatory bodies in the country.

The National Institution for Transforming India (NITI) Aayog has submitted a draft of a law to regulate the regulators to the finance ministry that aims to create a uniform national framework for orderly development of infrastructure and protection of consumer interests.

“We have held consultations with representatives of 30 stakeholder bodies and have recommended a draft that would change basic functioning of some of the regulatory bodies. It will lead to uniform regulatory system in the country,” a NITI Aayog functionary told HT.

As of now, the port regulator is mandated to set tariffs only whereas the electricity sector regulators have much wider powers of rule-making, licensing, power market development and imposing of penalties. The telecom regulator’s job is also to promote competition, which is not assigned to port or electricity regulators. Only some sectors like electricity and telecom have appellate tribunals whereas others like ports do not have such tribunals and perform both the functions.

A big change the panel had recommended is that the function of rule-making and administration of rules should be separated from judicial function. This would mean that the regulator will frame rules and ensure their implementation whereas the appeals against the orders passed by the regulators would be heard by Appellate Tribunals.

Sources said the proposed law would result in creation of regulators and appellate bodies for infrastructure sectors such as road and civil aviation. It will lead to curbing of over-arching powers of some of regulators. “The decision on this will have to be taken by the finance ministry,” the NITI Aayog official said.

He said the draft law prescribes elaborate procedure for appointment and removal of chairpersons and members of the regulating bodies and the tribunals. This is to reduce government intervention and to ensure transparency in functioning of the regulatory bodies, the official said.

Finance minister Arun Jaitley in his budget speech 2015-16 had announced introduction of regulatory reforms law across various sectors of infrastructure. The UPA government in 2013 had drafted the regulatory reforms bill but it could not be taken up by the cabinet due to differences.

The NDA government is expected to take a decision on the new regulatory framework that it believes would infuse more investment into the infrastructure sector and will result in ease of doing business. Officials expect the bill to be introduced in winter session of Parliament.

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