......Direct accountability of regulatory bodies to parliament is not Chakrabarty’s original idea and was recommended by the Damodaran committee last year. In addition, a draft regulatory reform bill, approved by the government last year, which also made similar recommendations, did not come up for consultation. In India, where most committee reports are reduced to good pieces of literature and draft bills and don’t see the light of the day for years, more and more regulators demanding not just more autonomy but also more accountability could mean that the Damodaran committee recommendations and the draft regulatory reform bill may be formalised. Former RBI governor D Subbarao has also expressed his support for making RBI directly accountable to parliament. Prior to his retirement in September last year, he had said that while the RBI Act does not lay down any formal framework to ensure accountability, it does follow “certain good practices (which) have evolved over the years.”............
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In spite of several recommendations that all the Acts of Parliament should have Regulatory Impact Assessment the Parliamentarians are averse to having this. If Parliament is not wanting to be accountable to the people putting it in place, how can one think that the RBI becoming accountable to Parliament would be a good practice? Regulatory Impact Assessment involves the Minister responsible for the introduction of the Act should get the assessment of the impact of the Act on the subjects of the Act during the last quarter of every year by a competent evaluation mechanism independent of the implementing agencies. Such Review should be placed before the Parliament during the first session every year and seek the opinion of the House for any improvements. If this were to take place, then it makes sense for autonomous institutions like the RBI also to be accountable to Parliament. We can't have different standards for different institutions in the case of accountability.
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