India’s securities market regulator has struck an important blow for the cause of greater transparency in governance.
Citizens will next week be able to go to the website of the Securities and Exchange Board of India (Sebi) and read the minutes of the regulator’s board meeting held on 4 December. Sebi has, according to a press release, “decided that the agenda papers submitted to the board on all policy issues will be made available in the public domain by putting them up on the Sebi website after the board has taken a decision on the issue. The minutes of the meeting relating to such items will also be made available on the Sebi website after the board has approved the minutes.”
Sebi chairman C.B. Bhave deserves support for a move that is not only a major improvement in the way Sebi functions, but is also a beacon for other regulators in the country. They would do well to follow in Sebi’s pioneering footsteps.
Jayachandran / Mint
Regulators around the world are prone to what economists call regulatory capture. This is when a watchdog—originally set up to protect consumer interests in naturally oligopolistic industries such as telecom, power and ports—is hijacked by the powerful interests it is supposed to keep an eye on. Such a threat is especially strong in a soft state such as ours.
Successive governments have done well since the early 1990s to set up and empower regulators in industries where the government was giving up its monopoly powers to a few private firms. These regulators have done well to keep down prices and establish the rules of the game. But we have seen too many instances—the allocation of spectrum to telecom firms or coal blocks to power companies, for example—that reek of regulatory capture. Transparency is a tool against regulatory capture.
The Reserve Bank of India is a special case. Nobody can accuse it of being unduly influenced by commercial and investment banks. But it is still opaque in the way it conducts its monetary policy.
The central bank has become more open of late and some may even argue that transparency is overrated when central banks are meant to surprise the markets. But it could, at the very least, make public the minutes of its monetary policy meetings.
And maybe there is also a need to take a tough look at the outdated Official Secrets Act to ensure that we get more information on decisions that affect our lives.
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