'Regulator reform and autonomy critical for civil service quality,' says NK Singh at BT India@100

NK Singh, the former Chairman of the 15th Finance Commission of India, addressed critical issues surrounding regulatory reforms and the lateral entry of private sector professionals into public service during his speech at the BT INDIA@100 event held at Bharat Mandapam in New Delhi. 

The session, titled "Abki Baar Reform the Sarkar," provided insights into the challenges facing India's regulatory framework and the importance of institutional independence.

Singh emphasized the perennial question, "Who will regulate the regulator?" and got into the need for an overhaul in the way regulators are selected and function. He reflected on his experience as the chairman of the committee responsible for selecting the first power regulator, highlighting the challenges faced by state power regulators in maintaining their independence. "State power regulators are not independent enough to fix tariffs in a manner that aligns with what tariff fixation should be," Singh stated, pointing out that the lack of independence undermines the effectiveness of these bodies.

He also called for legislative changes to enhance the autonomy and effectiveness of regulators, stressing that their independence is crucial for improving the quality of civil service operations. "To have a look at the independence of regulators is a very important issue," Singh asserted, advocating for a shift in the regulatory framework to ensure better governance.

During the session, Singh responded to questions regarding the entry of private sector professionals into regulatory roles, particularly within the Reserve Bank of India (RBI) and other key regulatory bodies. He acknowledged the challenges posed by the integration of private sector experts into government positions but noted that for the first time, the Union Public Service Commission (UPSC) has begun recruiting directors and deputy directors from a non-discriminatory perspective.

Singh also highlighted the necessity for a deep understanding of the public sector system, emphasising that domain expertise alone is insufficient. "The idea of having a completely independent governor of a central bank or a governor of the Reserve Bank or a Federal Reserve is alien," Singh remarked, stressing that a balanced approach, which includes familiarity with the system and framework, is essential for effective governance.

Singh underscored the importance of selecting the best talent for regulatory positions while maintaining an understanding of the system's workings. His remarks serve as a call to action for comprehensive reforms in India's regulatory landscape, aimed at enhancing transparency, accountability, and efficiency.