Guest Post by Bhargavi Zaveri and Smriti Parsheera
In this ET piece, we argue that the Supreme Court judgment in Cellular Operators Association vs TRAI (the 'call drop' order) takes a narrow approach towards 'transparency' and underscores the urgent need for a comprehensive, cross-sectoral law on regulatory governance. Current Indian laws governing regulatory agencies lack a consistent approach on the level of transparency, independence and accountability expected of our regulators. While laws governing TRAI, Airports Economic Regulatory Authority (AERA) and the newly set up Insolvency and Bankruptcy Board of India mandate "transparency" from the regulators, laws governing financial sector regulators like RBI and SEBI do not specifically obligate them to be "transparent". We argue that by taking a rather narrow view of 'transparency', the call drop judgement raises more questions than it answers as regards the latter set of regulators whose laws do not mandate them to be 'transparent'.
We also argue that absent a prescription in the law, regulators will continue to follow differing approaches towards public consultations, issuance of reasoned orders and their publication in the public domain. TRAI and SEBI, for instance, systematically publish all their orders, while the RBI does not. Public choice theory tells us that like all other economic agents, regulators and officials are self-interested actors who should not be expected to voluntarily adopt 'best practices' of governance, unless mandated to do so. Both these arguments point to the need for a legislative solution.