Made to IAS order/Business Standard

The power sector regulators at the Centre and in the states have been unable or unwilling to take the pricing decisions required, so the sector is bankrupt — hardly an advertisement for the “independent regulator” model.

If you put aside the theory on independent regulators, and look at the way the model has worked in practice, it has helped just one powerful trade union — the Indian Administrative Service, which has progressively engineered a monopoly on virtually every regulator’s job.
The electricity regulator’s job was once kept vacant for several months so that a particular IAS officer could retire and step into what he must have seen as a sinecure. Being such a regulator is the babu’s dream — absolute power with no retribution for wrong decisions, no ministerial oversight, no substantive answerability to Parliament, and guaranteed tenure of three to five years, and all of it post-retirement. No one wants to go back to the old licence-permit raj. But if market-oriented policy options are to work in key sectors, we need a new paradigm for independent regulators.