1. Prologue
  2. Question
  3. Brainstorming for the points:
    1. Introduction of the Answer
    2. Body#1: Areas where regulators achieved objectives:
    3. Body#2: Areas where regulators couldn’t achieve objectives:
    4. Body#3: Area where regulators need to be autonomous:
    5. Conclusion (Finding)
  4. Model Answer in English
  5. Model answer in Hindi

Prologue

To get best mileage out of this article series:

  1. First study the question topic from books and web resources.
  2. Answer each question in 200 words in 8 minutes in blue or black pen only.
  3. For answer writing use unruled A4 sized papers with 1 inch margin on all sides.
  4. Then read the remaining article.

Question

“For achieving the desired objectives, it is necessary to ensure that the regulatory institutions remain independent and autonomous.” Examine critically in the light of the experiences in recent past.

“वांछित उद्देश्यों की प्राप्ति के लिए यह सुनिश्चित करना आवश्यक है की विनियामक संस्थाएँ स्वतंत्र और स्वायत्त बनी रहे.” पिछले कुछ समय में हुए अनुभवो के प्रकाश में समालोचनात्मक परीक्षण कीजिए.

Brainstorming for the points:

This question was asked in UPSC Mains 2015. and this article in EPW can pretty much covers the entire theory and all the issues. Anyways, let’s start brainstorming:
Regulatory Bodies for GS Mains Paper2 GSM2

  • Premise of the question is- regulatory bodies have to be independent and autonomous. But from whom? Ans. mainly from the “political interference (Executive)” and the pressure groups, industrial lobbies that pressurize them directly or indirectly via politicians.
  • Don’t write “parliament or judiciary is ‘interfering‘ in their work”. Because by constitution and laws, these bodies are answerable to them. So, PAC vs Urjit Patel on Demonetization will be a wrong example here.
  • It’s difficult to recall any major lapse by regulatory bodies in the recent past, except NSEL scam and the subsequent merger of FMC with SEBI. But with just one example, we can’t fill up 200 words with it.
  • Besides, it doesn’t look good to open introduction / body with negative examples, and Examine critically doesn’t mean you’ve to CRITICISE. “Examine” means you’ve to investigate and derive a judgmental conclusion.

So, better approach it from following angles and sequence in body:

  1. DEMONSTRATE how regulatory bodies have succeeded in xyz case because they’re independent.
    1. TRAI has prevented mobile companies from looting and fleecing customers despite pressure from mobile companies and politicians who’ve secret sweet stakes in those mobile companies.
    2. RBI’s hawkish monetary policy to combat inflation despite pressure from corporate lobby, commercial banks and government to cut down the rates.
    3. RBI, SEBI, IRDA protected India from the aftermath of Global Financial Crisis (GFC)- because they’re quite ‘conservative’ when it comes to foreign investment or even allowing Indian rupees getting invested in risky assets.
  2. Find and show where regulatory bodies erred?
    1. FMC & NSEL. More in this lecture
    2. MCI’s corrupt chairman corrupt chairman Ketan Desai aided the loot-bazaar of self-finance medical colleges prevails.
    3. NPA and Twin balance sheet (TBS) problems are not RBI’s lapses. We are not framing answer for recruitment exam of theHindu columnists.
  3. Cite international example to substantiate the answer.
    1. Nuclear safety regulator elsewhere vs. situation in India.
    2. It’ll be wrong to cite UIDAI vs USA’s Social security administration. Because UIDAI is a number generator ‘agency’ and at max. it can regulate aadhar data and its usage, still it is not a ‘regulator’ per se in the traditional economics sense. And, if you hint that UIDAI’s work should be transferred to PFRDA- the pension regulator…and then you’ll be digressing from the original question. The question is about autonomy, not about efficient allocation of work.
  4. Autonomy alone can’t achieve desired objective, other factors also responsible:
    1. FSSAI, the statutory food regulator, had ordered ban on maggie but it was reverted by Bombay HC.  It shows that FSSAI is not manned by very competent officials else they should have prepared a ‘watertight’ case [OR if Maggie was not guilty then they shouldn’t have banned it in the first place!]. And by and large our food items have more pollutants than prescribed limits but FSSAI unable to address in holistic manner due to lack of sufficient manpower, testing labs and legal team.
    2. UGC failed to curb the proliferation of “deemed universities” where even basic infrastructure and faculties are missing. [and failed to curb even the anti-national elements in JNU, but that’ll be digression from the question and we are not writing answer for GSM3 “internal security”.]

If you brainstorm further, you can cite issues related to sports regulator, news channel regulator and so on. But you’ve to write a GS answer not a research paper. Even fitting these many points within 200 words, will be a challenge so let’s begin!

Introduction of the Answer

There are three ways to begin the introduction:
Define regulatory bodies Regulatory body is an organization set up by the Government to monitor, guide and control a particular sector such as banking, insurance, education or healthcare.
OR give Origin of the Qs’ premise
  • The number of regulatory bodies in India has increased greatly after the economic liberalization of 1991 when the government gradually transformed itself from player to umpire. Today, we’ve independent regulators for most of the areas of business, economy, higher education or healthcare. [Hint: We can’t start the origin from RBI in 1935: that’ll be bowler running from outside the stadium. The word limit will be over by the time you reach even SEBI!]
OR give Data Not very suitable approach for this answer.  There are __ number of regulatory bodies in India, out of them __ have been tainted by scams and scandals in last __ years.

Body#1: Areas where regulators achieved objectives:

While regulators enjoy functional independence, they still fall within the broad domain of the executive branch of the state, which makes them susceptible to the pressure groups and corporate lobbying.

  • Nonetheless, majority of the regulators of India have been able to perform their functions impartially, because of the able leadership and statutory immunity.
  • Whether it is RBI’s tight monetary policy to combat inflation despite lobbying from commercial banks and corporates to move in the other direction or the stringent norms by RBI, SEBI and IRDAI on the foreign investors, which prevented the ripples of Global financial crisis from greatly damaging Indian economy or CCI which has broken the cartelization of cement companies or TRAI protecting the customers against the fleecing by mobile companies.

Body#2: Areas where regulators couldn’t achieve objectives:

  • On the other end of the spectrum, we also have Forward Market commission (FMC) which failed to prevent NSEL crisis scam (Crisis and scam are different things) and subsequently it was transferred from consumer affairs ministry to finance ministry, or Medical council of India (MCI) whose president Ketan Desai was arrested for taking bribes to grant clearance to private colleges. [Later on Government also introduced bill to create new statutory body “National Medical Commission (NMC)” to replace MCI but if you start writing all that, you’ll be digressing and running out of word limit. Here you don’t have to focus on an individual regulator but provide an overview.]
  • So, much depends on the character of the chief and the personnel serving in an institute, than the statutory powers of the institute itself. [these can be used as examples for Ethics GS4 Questions as well!]
  • Earlier, an SC appointed Committee found many “deemed to be universities” unfit for the given status, and many of them had been setup about politicians and corporates. This raises questions on true autonomy of the UGC in its decision making. So, political will is also necessary to allow the regulators to function independently. Here too, Government planning to scrap UGC and AICTE and setup a new body called HEERA, but let’s not digress.
  • Similarly, the statutory food regulator FSSAI’s ban on Maggie noodles and subsequent developments highlight the need for manpower, capacity building and infrastructure upgrade to help such regulators to carry out their objectives effectively.

Body#3: Area where regulators need to be autonomous:

  • Atomic Energy Regulatory Board (AERB) falls under the Department of Atomic Energy. But, to address the issues of nuclear safety and environmental protection in a rational and impartial manner, an independent statutory body is necessary just like in the developed countries, lest the diplomatic and strategic objectives gain primacy over the safety of nature and mankind. [You don’t have to write that only Iran and N.Korea doesn’t have independent nuclear regulators and even Pakistan has an independent regulator and how this is one of the issues China raised to thwart our NSG membership etc. Stick to word limit, we are not writing an essay or IR/Diplomacy answer.]
  • Reliance KG Basin controversy also highlights the need of an independent statutory regulator in the upstream oil and gas sector instead of the present executive DG hydrocarbon, to balance investors’ confidence vs nation’s right over its natural resources.

Conclusion (Finding)

Since question asked you to “examine critically”, so the conclusion has to be “finding” type:

  • In the post-1991 India, majority of the regulators have been successfully performing the tasks entrusted to them ranging from financial stability to the protection of investors and consumers.
  • In sporadic cases, we find their failure in achieving the desired objectives- but their causes range from corrupt individuals & political interference to infrastructural & procedural bottlenecks. All these maladies necessitate the steps to ensure their independence and autonomy- both functional and financial.

This is ~550 words. So we’ve to compress to reach the prescribed word limit.

Model Answer in English

Question: “For achieving the desired objectives, it is necessary to ensure that the regulatory institutions remain independent and autonomous.” Examine critically in the light of the experiences in recent past. (200 words)

Answer 
(Introduction: Definition | Origin | Data)
Regulatory body is an organizations set up by the Government to monitor, guide and control a particular sector such as banking, insurance, higher education or healthcare.

(Body)

  • While regulators enjoy functional independence, they fall within the broad domain of the executive branch of the state, which makes them susceptible to pressure groups and lobbying.
  • Nonetheless, majority of the regulators have been successfully performing the tasks entrusted to them- whether it is RBI & inflation control, SEBI against financial scamsters, CCI against cartelization or TRAI & customer protection.
  • But, on the other end of the spectrum, FMC failed to prevent the NSEL scam and MCI president was arrested for corruption in granting permission to medical colleges.
  • Hence, much depends on the character and caliber of the personnel serving in an institute, than the statutory powers & autonomy of the institute itself.
  • The issue of UGC granting “deemed university” status to poorly managed colleges highlights that political will is also necessary to enable the regulators to achieve their objectives. [You don’t have to elaborate that politicians & businessmen setup private colleges and HRD pressurizes UGC to help them. This is not neither criticism nor extreme statement but mere highlighting of a fact in context of the question. Every professor knows it, unless he is living under a rock, but if he was living under a rock, UPSC would not have selected him as an evaluator!]
  • Following the practices in developed countries, to address the issues of nuclear safety and environmental protection in an impartial manner, an independent statutory body is necessary, instead of the present board which falls under the Department of Atomic Energy.
  • However, statutory status and independence alone is not the panacea. FSSAI’s ban on Maggie noodles and subsequent developments highlight the need for manpower, capacity building and infrastructure upgrade to help such regulators in achieving their objectives.

Conclusion (Summary | Finding)
In the post-1991 India, majority of the regulators have been successfully carrying out the tasks entrusted to them, and where they’ve failed- the causes range from corrupt individuals & political interference to infrastructural & procedural bottlenecks. Hence need of the hour is to initiate proactive reforms for their independence, autonomy and capacity building.

This is ~250 words.
Notes:

  • Ideally you should write full forms. But here I’ve not written Reserve Bank of India (RBI), because 1) I was not going to use the term again in the answer; 2) I had sufficient content to fill the 200 words even without writing full forms!
  • I removed the DG hydrocarbon point during compression, because 1) in real life, you can’t recall a decade old topic besides it’s not a recent ‘past and 2) UPSC’s RTI disclosure said they don’t give model answerkey to evaluator, so possible that professor himself may not be able to understanding the flow of logic.

Model answer in Hindi

प्रश्न – “वांछित उद्देश्यों की प्राप्ति के लिए यह सुनिश्चित करना आवश्यक है की विनियामक संस्थाएँ स्वतंत्र और स्वायत्त बनी रहे.” पिछले कुछ समय में हुए अनुभवो के प्रकाश में समालोचनात्मक परीक्षण कीजिए.  (200 words, 12.5 marks)

प्रस्तावना (व्याख्या से)
किसी क्षेत्र-विशेष जैसे की बैंकिंग, बीमा, उच्च शिक्षा या स्वास्थ्य आदि के संगठनो की निगरानी, मार्गदर्शन एवं नियंत्रण करने हेतु सरकार द्वारा बनाई संस्था को विनियामक संस्था कहते है.

  • यधपि नियामक संस्थाए कार्यात्मकरूप से स्वतंत्र होती है, किन्तु व्यापक मायने में वे कार्यपालिका का हिस्सा ही मानी आती है, अत: दबाब समूहो व उधोगपतिओ के पैरवीदारो से उनके प्रभावित होने की संभावना रहती है. इसके बावजूद भी ज्यादातर नियामक संस्थाएं सोंपी गयी ज़िम्मेदारियो का सफलता से वहन कर रही है- चाहे वो रिज़र्व बैंक द्वारा मुद्रास्फीति पर नियंत्रण, सेबी द्वारा वित्तीय घोटालेबाजों पर नकेल, भारतीय प्रतिस्पर्धा आयोग द्वारा उत्पाद संघो पर नज़र, ट्राई द्वारा उपभोक्ता संरक्षण आदि |
  • किन्तु उसी वर्णपट के दुसरे छोर पर हम पाते है की फॉरवर्ड मार्किट कमीशन NSEL घोटाले को रोकने में असमर्थ रहा. मेडिकल काउंसिल ऑफ़ इण्डिया के अध्यक्ष निजी मेडिकल कॉलेजो को मानको की अवहेलना करते हुए स्वीकृति देने के लिए घूस लेते पकडे गए | अत: नियामक संस्थाओं की निष्पादन क्षमता, उनकी कानूनी स्वायत्ता एवं स्वतंत्रता से ज्यादा इन संस्थाओ के कर्मियों के व्यक्तिगत चरित्र एवं नैतिकता पर भी निर्भर करती है.
  • विश्वविद्यालय अनुदान आयोग (यूजीसी) द्वारा बदहाल निजी कॉलेजों को भी “डीम्ड यूनिवर्सिटी” का दर्ज़ा देना यह दर्शाता है कि नियामक संस्थाओं के उद्देश्य की प्राप्ति के लिए राजनीतिक इच्छाशक्ति भी अनिवार्य है.
  • विकसित देशों में स्थापित प्रथाओं को देखते हुए, नाभिकीय सुरक्षा एवं पर्यावरण संरक्षण जैसे मुद्दों का निष्पक्षतापूर्ण निस्तारण करने के लिए वर्तमानमें परमाणु ऊर्जा विभाग के अन्तर्गत कार्यरत बोर्ड की जगह एक वैधानिक निकाय का गठन करने की भी आवश्यकता है.
  • यद्धपि नियामक संस्थाओं को वैधानिक दर्जा  एवं स्वतंत्रता देना रामबाण इलाज नही है, उदाहरणार्थ- भारतीय खाद्य संरक्षा एवं मानक प्राधिकरण द्वारा मैगी पर प्रतिबन्ध का केस सूचित करता है की नियामक प्राधिकरणों में मानव संसाधन, क्षमता-निर्माण व बुनियादी ढांचे को मजबूत करने की भी आवश्यकता है.

उपसंहार –
1991 के बाद के भारत में ज्यादातर नियामक संस्थाए सौपे गए कार्यों को सफलता पूर्वक कार्यान्वित कर ही रही है. किन्तु, साथ ही साथ भ्रष्टाचार, राजनीतिक हस्तक्षेप एवं कार्यात्मक व् बुनियादी व्यवधान जैसे कारकों के चलते  कुछ स्थानों पर ये संस्थाए असफल भी रही है | अत: समय की आवश्यकता है कि नियामक संस्थाओं की आजादी, स्वायत्ता एवं क्षमतानिर्माण की दिशा में सक्रिय सुधार हो.