The Centre has come out with a new draft for the Regulatory Reform Bill that is expected to help provide a much improved regulatory environment to boost investment in the infrastructure sector.

The proposed draft is the revised version of the UPA’s draft of Regulatory Reform Bill, 2013.

According to the consultation paper on the proposed law, there is a need to legislate an overarching regulatory law to speed up the regulatory reforms and standardise some basic institutional features and processes across all institutions.

Today, there is divergent philosophy and approaches to regulation across various infrastructure sectors.

The objective of the proposed Bill is to ensure orderly development of infrastructure services, enable competition and protect consumer interest in securing access to affordable and quality infrastructure.

Three principles

It is guided by the three general principles of separation of power, democratic accountability, and the federal principle.

The Centre has invited comments on the new draft by July 15, after which it will be finalised and necessary approvals be obtained for its enactment.

“To secure democratic accountability, the regulator has been made responsible to the legislature and to the people at large. The federal principle has also been followed through distribution of subjects of economic regulation between Union and State competencies,” the draft said.

Accordingly, the rule-making and enforcement functions have been separated from judicial functions, which have been vested in appellate tribunals.

The paper also states that the government may, from time to time, constitute regulatory commissions and appellate tribunals besides the tariff regulatory commissions.

The new draft is in response to the Budget announcement this year, when Finance Minister Arun Jaitley felt that there is a need to tackle the lack of common approach and philosophy in the regulatory arrangements prevailing even within the different sectors of infrastructure.

Budget announcement

“Our Government, therefore, also proposes to introduce a regulatory reform law that will bring about a cogency of approach across various sectors of infrastructure,” he said in his Budget speech on February 28.

At present, various infrastructure sectors have different regulators.

For instance, the telecom sector has the Telecom Regulatory Authority of India and the power sector has the Central Electricity Regulatory Commission.

The paper pointed out that these regulators lack consistent and a coherent approach probably because of the regulatory framework in various infrastructure sectors evolved at different points of time — when they were opened up to private participation.

In fact, the previous government also tried to reform the regulators by bringing a draft Bill.

However, before the Bill could be taken to Parliament, the Lok Sabha was dissolved. Subsequently, the Modi government incorporated views presented on the old draft and NITI Aayog presented a revised draft.