Go to the core of a problem if minimum governance were to become a reality
The government recently decided to reduce the remunerations of the heads of all 11 regulatory bodies by nearly half. According to the new guidelines, the existing chairpersons as well as future appointees will be eligible for maximum basic pay not exceeding Rs 2,25,000, down from Rs 4,50,000 as recommended by 7th Pay Commission. There is more. Apart from paring down the salary, even the pension drawn by the regulatory heads at the time of their employment will be deducted. However, the government has decided to restore perks like car, house, phone, medical facilities, and tour allowances.
The question is what does government want to achieve with this move? Does it want to cut the costs of running these regulatory bodies? If that is the case, then the move could well turn out to be an exercise in tokenism because of the perks that have been retained for the officials. In fact, over a period of time the effective cost of providing these perks could add up to a hefty outgo for the government.
There are more pertinent questions. The NDA had promised “minimum governance, maximum government.” Somehow, that promise does not appear to have come through. Aside from the matter of reduced compensation for the chairpersons, the regulatory bodies serve actually to re-layer the bureaucracy. However, there is no let-up in this. For example, the Real Estate Regulatory Act has created the base for another regulatory body. It also does not stop at that, because apart from the regulatory bodies are the appellate tribunals.
In sum, it would seem there is no immediate scope for an end to such establishments. Sinecures for favoured officials are a reality. It encompasses those from every aspect of governance, that goes beyond regulatory bodies and appellate tribunals. A former judge of the Supreme Court can be appointed governor of a state, sidestepping convention. In another case, a secretary to the Union government was given not one, but two post-retirement assignments, one following the other in two different bodies.
In the middle of all this the one person who never gets the right answers to the question of propriety of these positions but has to bankroll them is the taxpayer.
Over the years, a mind-set has developed that when it comes to recruitment for regulatory agencies, the focus has to be on selecting a bureaucrat. This is done under the assumption that they are well versed with government system. However, evidence on the ground suggest that they might not necessarily be as effective as they are made out to be. Regulators are usually reactive in their approach and not proactive. They only react when a trouble arises and then do the firefighting.
Meanwhile, one way to deal with the pay packet issue of regulators would be to free-up the pay scale of all regulatory bodies and attract best of talent without putting a burden on the exchequer. Then, industry bodies concerned would create the corpus to run the regulatory bodies. This would serve the purpose of lifting the financial burden of these bodies from the government.