{"id":44957,"date":"2025-06-09T20:40:57","date_gmt":"2025-06-09T15:10:57","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=44957"},"modified":"2025-06-11T17:30:19","modified_gmt":"2025-06-11T12:00:19","slug":"consultative-regulation-making","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/09-06-2025\/consultative-regulation-making","title":{"rendered":"Consultative Regulation-making"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Reserve Bank of India (RBI) issued a policy framework for <strong>how it will publish regulations, directions, guidelines and notifications.&nbsp;<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Background&nbsp;<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>This follows a similar move by the<strong> <a href=\"https:\/\/www.nextias.com\/blog\/securities-and-exchange-board-of-india-sebi\/\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/blog\/securities-and-exchange-board-of-india-sebi\/\">Securities and Exchange Board of India (SEBI)<\/a>,<\/strong> which published regulations setting out the procedure it would follow to issue regulations.<\/li>\n\n\n\n<li><strong>Both RBI and SEBI are statutory regulators<\/strong> with<strong> quasi-legislative powers<\/strong>, have initiated reforms to <strong>improve transparency and accountability<\/strong> in regulation-making.<\/li>\n\n\n\n<li>These reforms are in line with <strong>global best practices <\/strong>and are essential to uphold the <strong>rule of law.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Recent Reforms<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>RBI will now conduct <strong>impact analyses<\/strong> before issuing regulations.<\/li>\n\n\n\n<li>SEBI will <strong>clarify the regulatory intent<\/strong> and objectives of its proposals.<\/li>\n\n\n\n<li>Both regulators will <strong>invite public comments for at least 21 days <\/strong>and will periodically review their existing regulations.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Significance<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Strengthens Democratic Legitimacy: <\/strong>It ensures that rule-making by unelected bodies (like RBI and SEBI) is democratically accountable.<\/li>\n\n\n\n<li><strong>Improves Regulatory Quality:<\/strong> Inviting feedback from stakeholders (businesses, experts, civil society) helps regulators design better, more effective rules.<\/li>\n\n\n\n<li><strong>Increases Public Trust:<\/strong> Transparency in regulation-making builds trust in the regulatory process.<\/li>\n\n\n\n<li><strong>Enhances Compliance and Implementation:<\/strong> Regulations developed through consultation are more likely to be realistic and practical, leading to better compliance.<\/li>\n\n\n\n<li><strong>Facilitates Periodic Review and Reform:<\/strong> Public inputs and defined review mechanisms ensure that outdated or ineffective regulations are identified and amended or repealed.<\/li>\n\n\n\n<li><strong>Aligns with Global Best Practices:<\/strong> Advanced jurisdictions like the US, UK, and the EU have institutionalised consultative mechanisms.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Slows Down the Regulatory Process: <\/strong>Consultation and impact assessment add time to the regulation-making process.<\/li>\n\n\n\n<li><strong>Risk of Regulatory Capture: <\/strong>Powerful interest groups or industry lobbies may dominate consultations.<\/li>\n\n\n\n<li><strong>Resource and Capacity Constraints: <\/strong>Regulators like RBI and SEBI face limited administrative capacity and technical expertise.\n<ul class=\"wp-block-list\">\n<li>Conducting detailed impact assessments, public consultations, and cost-benefit analyses for each regulation can overburden staff and divert resources from enforcement or supervision.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Confidentiality and Sensitivity: <\/strong>Certain regulatory matters (e.g., monetary policy, cybersecurity, systemic risks) require confidentiality.\n<ul class=\"wp-block-list\">\n<li>Public consultations in such cases can lead to speculation, market volatility, or information leakage.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India has begun moving toward more transparent and consultative financial regulation-making through reforms by RBI and SEBI.<\/li>\n\n\n\n<li>However, further steps\u2014like mandating economic justification, strengthening accountability mechanisms, and enacting a comprehensive procedural law\u2014are needed to institutionalize good regulatory practices across the board.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.thehindu.com\/opinion\/op-ed\/consultative-regulation-making-that-should-go-further\/article69672025.ece#:~:text=When%20proposing%20any%20new%20regulations,periodically%20review%20their%20own%20regulations.\" rel=\"nofollow noopener\" target=\"_blank\"><strong>TH<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">The Reserve Bank of India (RBI) issued a policy framework for how it will publish regulations, directions, guidelines and notifications.\u00a0<\/li>\n<p><\/p>\n<h3><strong>Background\u00a0<\/strong><\/h3>\n<li class=\"ms-5\">This follows a similar move by the Securities and Exchange Board of India (SEBI), which published regulations setting out the procedure it would follow to issue regulations.<\/li>\n<li class=\"ms-5\">Both RBI and SEBI are statutory regulators with quasi-legislative powers, have initiated reforms to improve transparency and accountability in regulation-making.<\/li>\n<li class=\"ms-5\">These reforms are in line with global best practices and are essential to uphold the rule of law.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/09-06-2025\/consultative-regulation-making\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-44957","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=44957"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44957\/revisions"}],"predecessor-version":[{"id":45129,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44957\/revisions\/45129"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=44957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=44957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=44957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}