Regulators should not depend on Govt grant, must have own income source: Ex-Sebi chief


PTI, Jan 7, 2020, 4:40 PM IST

New Delhi: Regulators in the country must have their own sources of income so that they do not have to depend on grants provided by the government, capital markets watchdog SEBI’s former Chairman U K Sinha has said.

In his new book ‘Going Public: My Time at SEBI’, Sinha has said that financial independence is the basic requirement for the functioning of an independent regulator.

A regulator should have its own source of income and flexibility to utilise it without looking up to the government for funds, he has written.

“There have been some recent developments to take away this freedom and ask SEBI to park its income in the Consolidated Fund of India or in the Public Account, and to seek prior approval of the government before incurring any capital expenditure. Such efforts are not conducive in creating a strong and independent regulatory environment,” he said.

The SEBI Act provides for the regulator to levy fees and charges and create its own fund. The board of SEBI prepares its annual budget, where it can revise the rates of fees upwards and downwards based on its estimate of the money required for its activities during the year. The SEBI board also has representation from the government.

The former IAS officer said all other regulators also must have their own sources of income and not survive on the receipt of grants from the government.

There have been reports that the government was pushing SEBI to transfer 75 per cent of its surplus to the Consolidated Fund of India, but SEBI is believed to have opposed the proposal on concerns about loss of autonomy.

There have also been concerns in the recent past about autonomy of another major financial sector regulator, the Reserve Bank of India.

In the book published by Penguin India, Sinha said the independence of a regulator should not be defined only with regard to independence from the government and its officials.

It should also be seen in the context of independence from any outside influences, including those from market participants and business corporations, he said.

Sinha said there have been concerns about market capture of regulators in other parts of the world and the senior leadership and the boards of the regulators have to remain extra cautious on this account.

“Another dimension of independence is internal independence. Although the law permits this, the quasi-judicial function of SEBI needs to be separated from executive supervision,” he said.

With regard to accountability, Sinha said independence and accountability go hand in hand.

“Today, there is no satisfactory arrangement for a performance appraisal of a regulator like SEBI. The media does it. The government does it through the presence of their representatives in the SEBI board or while answering questions in Parliament,” he said.

According to Sinha, Parliamentary supervision over the regulators is a superior option to ensure accountability. The standing committee of Parliament for different ministries may have to take up this responsibility in a regular and structured way.

Regulations formulated by SEBI are required to be placed before Parliament at the earliest. The Parliament has the right to reject or modify, but the same never happens. Hardly any subordinate legislation gets modified or rejected, Sinha has mentioned in his book.

The Parliamentary committee on subordinate legislation has a huge task of reviewing not only the regulation framed by the multiple regulators but also the rules framed by various ministries under different laws.

“In order to help them perform this task on a structured and continuous basis, substantial capacity has to be created in this committee and in other committees of Parliament, ” he noted.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Jayant Patil claims BJP used irrigation ‘scam’ to blackmail Ajit Pawar; Fadnavis, NCP chief hit back

Medical College expels 5 MBBS students from hostel for ragging juniors

Insulting women is in DNA of Cong leaders, alleges Jharkhand BJP

Man arrested from Delhi for calling up Pappu Yadav posing as aide of Lawrence Bishnoi

Tejasvi Surya hits out at Kharge, CMs of Cong-ruled states over poll promises

Farooq Abdullah seeks inquiry into spike in terror attacks in Valley since Omar’s swearing-in

Sabarimala pilgrims to get free insurance coverage of Rs five lakh

Related Articles More

Sensex, Nifty decline on selling in IT shares, FII sellout; end Samvat 2080 with 22% gains

Sensex, Nifty decline in early trade on unabated foreign fund outflows, selling in IT stocks

Gold surges Rs 1,000 to breach Rs 82k-mark as Diwali sparkles demand

Car makers witness record sales on Dhanteras; Oct bookings up by 30%

Dhanteras begins on slow note; Jewellers expect footfalls to increase

MUST WATCH

Gho Pooja in Deepavali Festival

Melukote Deepavali

Ganapathi Co-operative Society Ltd

Udayavani Chinnara Banna 2024

Annapoorna Aahar | Food Places In Mysore


Latest Additions

Jayant Patil claims BJP used irrigation ‘scam’ to blackmail Ajit Pawar; Fadnavis, NCP chief hit back

Medical College expels 5 MBBS students from hostel for ragging juniors

Insulting women is in DNA of Cong leaders, alleges Jharkhand BJP

Man arrested from Delhi for calling up Pappu Yadav posing as aide of Lawrence Bishnoi

Tejasvi Surya hits out at Kharge, CMs of Cong-ruled states over poll promises

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.