Policy decisions see a disconnect as regulators remain headless

For the second time in four months, the government last week sent out feelers inviting applications for a new chairman for the Competition Commission of India (CCI) — a position lying vacant since Ashok Kumar Gupta demitted the chairman’s office on October 25 last year.

CCI is not alone in its search for a chairman.

Petroleum and Natural Gas Regulatory Board (PNGRB), which has been without a chairman for over two years, has advertised twice over — the last being in June last year.

The post of chairman of PNGRB has been lying vacant since December 4, 2020, when Dinesh K Sarraf completed his three-year term. The government has run the candidate selection process but hasn’t been able to appoint a chairman yet.

The government started the search for a successor to the Pension Fund Regulatory and Development Authority (PFRDA) chairman Supratim Bandyopadhyay, whose term ended in January this year.

Experts feel that the absence of leadership at these strategic economic regulatory bodies is holding up crucial policy decisions and showing the regulators in poor light. 

“It is not good governance practice and sends the wrong signals to the corporate world. The selection process should start three months before the incumbent retires. Bureaucracy needs to push harder,” said D K Mittal, former secretary, Department of Financial Services. 

CCI, for instance, has not been able to take any action against the complaints it has received since October due to insufficient quorum. The three-member quorum doesn’t have its required strength since the post of chairman is yet to be filled. 

After taking legal opinion, the antitrust watchdog decided to overlook the quorum requirement to clear the pending merger applications using the ‘doctrine of necessity’. A senior official said it was more a doctrine of convenience than necessity and that the government should instead have expedited the appointment of chairperson. 

The doctrine of necessity enables legal authorities to take a certain kind of action at a certain moment, which would otherwise not be regarded within the scope of law in a general legal situation.

The absence of a chairman at the petroleum regulator has held up crucial policy work, such as the amendment of the PNGRB Act which is expected to give the regulator more teeth in its plans to classify city gas pipelines as ‘common carriers’.

A search-selection committee headed by V K Saraswat, member (science & technology), NITI Aayog, in June 2021 picked former power secretary Sanjeev Nandan Sahai for the top job. But that appointment was not confirmed by the Appointments Committee of the Cabinet (ACC). According to sources, ACC did not confirm the candidate recommended for CCI chairman’s role either.

“Government bodies in the oil and gas sector have always, be it in administration or public sector undertakings, faced difficulty filling top positions. The selection often focuses on tapping into individuals who have spent decades in the sector, and have intrinsic understanding of the challenges and realities of the sector, which is not a large pool,” said a senior oil ministry official.

PFRDA, too, has not appointed a new chairman since the retirement of its former head Supratim Bandopadhyay on January 16, 2023. The Financial Sector Regulatory Appointment Search Committee, headed by the Cabinet secretary, has interviewed the candidates and recommended three names for the post; the file is pending with the Cabinet.

The PNGRB board, which comprises four members (besides the chairman), is also not full. It is the same story at PFRDA with vacant positions on its board. CCI, in anticipation of two of its members retiring soon, has already advertised for the post.

Inputs from Nikesh Singh