For achieving the desired objectives,it is necessary to ensure that the regulatory institutions remain independent and autonomous. Discuss in the light of experiences in recent past.

Why independence is necessary

• Ministries promote sectors and often own public enterprises. A regulator that is a wing of the same ministry cannot fairly police that enterprise or its private rivals.
• Investors and citizens need a known rule, not a phone call. Predictable orders lower the cost of capital and the temptation of corruption.
• Technical questions (capital adequacy, grid codes, clinical trials) need tenure and expertise. Annual transfer of generalist officers destroys memory.
• Independence must still answer to statute, judicial review, CAG audit of accounts, and a parliamentary committee. Autonomy without accountability becomes a fief.

Experiences in the recent past

• Reserve Bank of India: statutory independence under the RBI Act is real on paper. Tensions over interest rates, government borrowing, and later public debate on the central bank’s reserves showed that fiscal pressure can crowd a monetary and banking regulator. When the banking regulator is leaned on to hide non-performing loans, financial stability — the objective — is the first casualty.
• SEBI: a statutory market regulator with adjudication powers. Sahara and other long enforcement sagas showed both the need for a strong SEBI and the delay when orders are stayed and coordination with the government and courts is weak. Appointment and a full board matter as much as the Act.
• TRAI and the telecom department: TRAI is recommendatory on many licensing issues while DoT remains licensor. 2G-era experience showed that when spectrum and licences are political, a weak or bypassed regulator cannot deliver competitive, non-corrupt allocation. CAG’s 2G audit became a public substitute for a regulator that had not been allowed to bite.
• CERC and SERCs in electricity: open access, tariff and renewable purchase obligations fail where State governments keep utilities as patronage machines and treat the electricity commission as a tariff-suppressing office. The Electricity Act, 2003 assumed independent commissions; State practice often did not.
• CBI and CVC: not classic market regulators, but recent disputes over the CBI director’s appointment, the Single Directive, and ministry control illustrated how an investigating body that is not operationally autonomous cannot meet the anti-corruption objective. The Vineet Narain line and later the 2013 CBI-director statute were attempts to write independence into process.
• Food Safety and Standards Authority and drug regulators have faced charges of understaffing and industry capture — autonomy without capacity is empty.
• Appointment of retired civil servants on short, renewable terms, funding through ministry grants, and the power to issue binding “directions” in the parent Act are the usual levers that hollow out autonomy.

How to keep institutions independent in practice

• Fixed, non-renewable tenure; a bipartisan or collegium-style appointment; removal only by a stated process.
• Independent budget charged on the Consolidated Fund or a regulated fee, not a monthly ministry dole.
• Open hearings, reasoned orders, and a specialised appellate tribunal so independence does not mean unreviewable power.
• No parent-ministry nominee dominating the board where the ministry is a player in the market.