Regulatory Bodies

Regulatory bodies are organizations established to monitor and regulate specific sectors of the economy, ensuring fair practices and protecting public interests. 

Since 1991 (after LPG reforms), numerous authorities have been formed to prevent monopolies and regulate crucial sectors like banking, insurance, and capital markets.  

Most regulatory bodies are quasi-judicial in nature. 

Types: There are primarily two types of regulatory bodies i.e., Statutory regulatory bodies (e.g., SEBI) and Self-regulatory bodies (e.g., Bar Council of India). 

Functions: 

Need:  

Protecting Consumer Interests: Enforcing standards and ensuring fair practices (e.g., FSSAI for food safety, TRAI for telecom pricing). 

• • • Setting health and safety standards (e.g., CPCB for environment) 

Market Stability: Preventing fraud and promoting competition (e.g., SEBI for financial markets, CCI for fair competition). 

Economic Growth: Supporting sectoral growth (e.g., RBI for financial health, IRDAI for insurance), and attracting investments. 

Legal Compliance: Upholding laws and transparency (e.g., CVC, ED for legal compliance). 

Ethical Standards: Regulating professional ethics (e.g., Bar Council of India for legal professionals). 

• Examples: There are more than 30 regulatory bodies. Some of the authorities are as under:  
  • Reserve Bank of India (RBI): Oversees credit supply, banking operations, and ensures financial stability. 
  • SEBI: Regulates the securities market, ensures fair practices, and protects investors. 
  • Insurance Regulatory and Development Authority of India (IRDAI): IRDAI regulates the insurance sector, ensuring fairness and consumer protection. 
  • Ministry of Corporate Affairs (MCA): Regulates corporate governance and safeguards stakeholders’ interests. 
  • Pension Fund Regulatory and Development Authority (PFRDA): PFRDA oversees the National Pension System (NPS) and pension industry development. 
  • Petroleum and Natural Gas Regulatory Board (PNGRB): PNGRB was set up under PNGRB Act, 2006 that set technical and safety standards for petroleum, petroleum products, natural gas, and related infrastructure projects.  
  • Central Electricity Regulatory Commission: It regulates tariffs for Central Government-owned electricity generating companies, and oversees their inter-State transmission. 

Issues: 

• • Lack of Independence: Indian regulators, like TRAI, face interference from ministries, compromising their autonomy and objectivity. 
  • Absence of Financial Autonomy: They depend on ministry approval for budgets, and surplus funds are returned to the Consolidated Fund of India, limiting financial independence. 
  • Ineffective Appointment Processes: Top officials are often filled by retired civil servants lacking regulatory expertise, affecting credibility and efficiency. 
  • Lack of Parliamentary Accountability: Regulators lack sufficient oversight from Parliament, weakening public accountability and transparency in their decisions. 
    • E.g., SEBI is not directly accountable to Parliament’s Standing Committee on Finance. 
  • Inadequate Stakeholder Engagement: Indian regulators often fail to engage with stakeholders, resulting in decisions that don't fully address public or industry needs. 
    • E.g., SEBI’s unclear communication of regulatory decisions create uncertainty among market participants. 
  • Fragmented Regulatory Framework: Different financial segments (insurance, bonds, derivatives) are overseen by separate regulators that hinders market efficiency. 
    • E.g., Separate regulators for insurance and bonds hinder credit default swaps (insurance against loan default) and corporate debt market growth. 

Steps to Reform Regulatory Bodies 

• 12th Report of the 2nd ARC Suggested: 
  • Simplify, streamline, and make regulatory procedures transparent, citizen-friendly, and less discretionary to reduce corruption. 
  • Strengthen internal supervision and independent assessments of regulatory agencies. 
  • Promote self-regulation in sectors like taxation and public health to ease enforcement. 
• 13th Report of the 2nd ARC Recommended: 
  • Ministries should create a ‘Management Statement’ outlining regulators' objectives and roles. 
  • Ensure uniformity in the appointment, tenure, and removal of regulatory authorities for consistency and independence. 
  • Strengthen parliamentary oversight of regulators through Standing Committees for accountability. 

SEBI 

• About: SEBI is a Statutory Body (a Non-Constitutional body) established under the SEBI Act, 1992. 
  • It was constituted as a non-statutory body on 12th April 1988 through a resolution of the Government of India 
  • Prior to SEBI, the Controller of Capital Issues, governed under the Capital Issues (Control) Act, 1947, was the regulatory authority for capital markets. 
• Purpose: SEBI’s main functions are to protect the interests of investors in securities and to promote and regulate the securities market in India. 
• Structure: SEBI’s board includes a Chairman, and other whole-time, and part-time members. 
  • The Securities Appellate Tribunal (SAT) handles appeals against SEBI’s decisions, with powers similar to those of a civil court. 
• Key Responsibilities: It enables issuers to raise finance, ensures safety and accurate information for investors, and promotes a competitive market for intermediaries.

Way Forward

• Accountability: Regulatory bodies should be accountable to Parliament's Standing Committee, providing a mechanism for scrutiny, transparency, and public confidence.  
  • The annual expenditure of the regulator must be audited by the CAG and its report should be laid before Parliament. 
  • Regular reviews with input from experts, academics, and analysts would assess their actions and effectiveness. 
• Independent Assessments: Collaborate with research institutions like the National Institute of Securities Markets (public trust established by SEBI in 2006) and major academic institutions such as the Indian Institutes of Management (IIMs) for rigorous research, market monitoring, and informed decision-making. 
• Interdisciplinary Collaboration: Regulatory bodies like SEBI, RBI, IRDAI, and others  should create cohesive regulatory frameworks that enhance market stability and prevent conflicting regulations that stifle innovation. 
• Building Research Capacity: They should build a deeper pool of expertise by forming an advisory council of specialists in economics, finance, and law for better decision-making and interventions. 
• Leveraging International Best Practices:  Regulatory bodies can look to successful case studies such as the UK’s Regulatory Policy Committee, Australia’s Productivity Commission, that encourage regulatory coherence, and enhanced market efficiency. 
  • Brazil's telecom regulator is independent, with council members chosen by the president and approved by the Parliament. 
• Independent Umbrella Body: Former CJI NV Ramana emphasized the need for an independent umbrella body to bring agencies like the CBI, SFIO, and ED under one roof, created under a statute with defined powers, functions, and jurisdictions.  
• A similar body is needed for regulation of these regulatory bodies. 

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Gender Budget 2025-26

Source: PIB

The Gender Budget Statement (GBS) 2025-26 marks a significant step toward gender-responsive budgeting (GRB), with increased allocations and wider participation from ministries. 

What are the Key Highlights of the GBS 2025-26? 

• Rise in Budget: The Gender Budget for FY 2025-26 is Rs 4.49 lakh crore (8.86% of total Union Budget 2025-26), a 37.5% increase from Rs 3.27 lakh crore in FY 2024-25.  
• GBS 2025-26 is India's largest-ever gender budget, boosting women's welfare, education, and economic empowerment, with 49 ministries reporting gender-specific allocations. 
• Parts of GBS 2025-26: The Gender Budget has been categorised into three parts. 

Note: Gender refers to the characteristics of women, men, girls and boys that are socially constructed. While sex is a biological characteristic related to chromosomes and reproductive organs. 

What is Gender Budgeting in India? 

Gender budgeting is a strategic tool used by governments to allocate resources efficiently based on the distinct needs of different genders.  

It ensures that policies and resource allocations are gender-sensitive and address specific needs within existing frameworks. 

India’s gender equality commitment, starting with  Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), 1979 ratification in 1993, led to the first Gender Budget Statement in 2005-06, and it has been included annually since, reflecting ongoing focus on gender-sensitive policies. 

Gender budgeting falls under the Samarthya sub-scheme of Mission Shakti. 

Gender budgeting is not just a fiscal tool but a moral necessity to break the cycle of gender inequality. 

India ranks 129th out of 146 countries in the 2024 Gender Gap Report, indicating significant room for improvement in gender equality. 

Empowered women contribute to future generations by investing in their children’s education and health, creating a positive cycle of development. 

Implementation:  

• • Central Level: Ministry of Women and Child Development (MWCD). 
  • State Level: Departments of Women and Child Development, Social Welfare, Finance, and Planning are responsible for gender budgeting at the state level. 
  • District Level: The Hub for Empowerment of Women (HEW) coordinates gender budgeting at the district level, and each hub must have at least one gender specialist. 
• Importance: Promotes gender equality by addressing discrimination and exploitation and supports Sustainable Development Goal 5 (global gender equality) efforts. 
  • It supports the implementation of women-specific legal frameworks like the Criminal Law Amendment Act, 2013 and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 

Note: The Mission Shakti initiative in 2021, under the MWCD, is a comprehensive program to empower women in India.  

• It consists of two sub-schemes: Sambal (focuses on women’s safety and security) and Samarthya (aims at empowering women through various skill-building and capacity development programs). 

What Challenges Does Gender Budgeting Face in India? 

• Ambiguities in Allocation: The unclear methodology for assigning funds to gender-sensitive schemes often results in discrepancies, such as Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) being underreported in Part B despite its significant female workforce. 
  • Pradhan Mantri Awaas Yojana–Grameen (PMAY-G), which prioritizes women's ownership of homes, reports only 23% of houses allotted to women, despite being classified in Part A of the GBS, which claims 100% allocation for women. 
• Concentration of Funds: Around 90% of the gender budget is concentrated in just a few ministries, with schemes like Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), MGNREGS, and PMAY-G, limiting its impact across other sectors. 
• Long-term Schemes: The inclusion of long-term schemes like Ayushman Bharat and Awas Yojana in gender budgeting diverts funds from immediate-impact programs such as Mission Shakti and female education, hindering real-time women’s empowerment and skill development. 
• Monitoring and Evaluation: Inadequate tracking mechanisms, poor quality of gender impact assessments, and a lack of gender-segregated data hinder the accurate assessment of needs and outcomes. 
  • The United Nations calls for stronger sectoral monitoring and collaboration between the MWCD and Ministry of Finance to enhance the design and effectiveness of the Gender Budget Statement. 
• Political Will: Gender budgeting may not always align with political priorities, resulting in insufficient support. 

Way Forward 

• Integration: Gender budgeting should be integrated across all ministries, including infrastructure, and rural development, ensuring gender-sensitive allocations in every government initiative. 
  • Invest in collecting and analyzing gender-specific data to better understand women's needs and the impact of policies. 
• State GBS: Encourage state governments to increase share in GRB to ensure the inclusion of vulnerable women, including those from tribal groups, in the planning process. 
• Clarification of Reporting Methods: There is a need for transparency in the allocation and reporting processes.  
  • Public disclosure of the methodologies used to allocate funds and the rationale behind them would increase accountability. 
  • Conduct regular gender audits across ministries to evaluate the effectiveness of the allocated funds. 
• Capacity Building: Training government officials, and stakeholders authorities on gender budgeting will help develop the necessary expertise to incorporate gender perspectives in budget utilizations and assessments.  

UPSC (PYQ) 

Prelims

Q. Which of the following gives ‘Global Gender Gap Index’ ranking to the countries of the world? (2017)

(a) World Economic Forum 
(b) UN Human Rights Council 
(c) UN Women 
(d) World Health Organization      

  Ans: (a)

Q.1 “Empowering women is the key to control population growth”. Discuss. (2019) 

Q.2 Discuss the positive and negative effects of globalisation on women in India? (2015) 

Q.3 Male membership needs to be encouraged in order to make women’s organization free from gender bias. Comment. (2013)

Q.4 What is the significance of Gender Budgeting in India, and how does it contribute to women’s empowerment?

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