India financial regulators need formal impact assessment rules, government report says
India's financial sector regulators need to put in place a formal process to assess the impact of their regulations, the government's Economic Survey said on Friday.
The survey, presented a day ahead of the annual budget, details the state of the economy while flagging longer-term economic and policy issues.
Its suggestions and recommendations are not binding.
Regulators in the financial sector, such as the Reserve Bank of India, Securities and Exchange Board of India and Insolvency and Bankruptcy Board, are largely left to regulate themselves, the report said.
While there are public consultation processes followed before new rules and regulations are formed, "there is a huge potential for improvement in their responsiveness", it added.
The report suggested that regulators set up an independent Regulatory Impact Assessment (RIA) agency internally. The RIA would directly report to the board of the regulator, which includes members from the government and independent directors.
This can provide an "impartial and objective assessment of the regulatory processes and outcomes, including the economic and social impacts of regulations," the report said.
Such a process would also improve the transparency and responsiveness of regulators, it added.
