Best of BS Opinion: Why India needs wide-ranging regulatory reforms

Today's opinions track regulatory practices and reforms that are required across key sectors of the Indian policy-scape.

Hello, and welcome to BS Views, our daily wrap of today's editorials and columns. Today's opinion pieces track regulatory practices and reforms that are required across key sectors of the Indian policy-scape. Unfortunately, they are found lacking in both first principles as well as implementation. Read on for more.  

 

The Gensol Engineering/BluSmart fraud reveals several lacunae in corporate governance. Our first editorial argues that instead of more regulation, what is required is proactive action from independent directors, boards, and auditors when they spot bad actors, particularly at startups which represent innovation, rapid growth, and are young companies with limited resources. A stronger boardroom, bold independent directors, and vigilant external auditors should keep them within the bounds of the law. Having a unicorn or decacorn status may give startups a high, but bypassing the ethical way of doing business could well be their endgame.   

 

Our second editorial finds a bleak landscape on the justice delivery front for Indian citizens. The latest Indian Justice Report ranks states looking at the four pillars of the justice system: Police, judiciary, prisons, and legal aid. While rankings may suggest some are doing a better job, the actual scores suggest it is just a matter of relative performance. Our editorial says that a major part of the problem is the shortage of personnel at every level of the justice system. Making things worse is the quality of training, with basic knowledge of the law and constitution often absent. Unless it shakes off colonial legacies of repression and control, India will find it hard to transition to a justice system guided by the aim of service to the people.  

 

KP Krishnan writes that our non-financial regulatory system would do well to take a leaf out of the financial sector regulatory bodies. The report of the Financial Sector Legislative Reforms Commission (FSLRC) is a good place to start. Three basic principles must drive regulatory reform, he writes: foundational thinking, identifying a clear set of functions, and creation of the checks and balances. Unfortunately, most regulators in other sectors are more basic, while recently-created regulators do not have sufficient autonomy. There is also much dissatisfaction about the regulatory structure for companies, which imposes substantial overheads. Middle India, where entrepreneurship and employment are most present, needs to be treated better by the government.  

 

Our second columnist Vinayak Chatterjee looks at a futuristic world that will require substantial regulatory changes in terms of urban infrastructure, laws, and regulation. He considers the electric-Vertical-Take-off-and-Landing (eVTOLs) crafts, also known as air taxis, that are readying to transform urban travel. While India’s regulatory landscape is preparing for these, no operational licenses have been issued yet. he points out. A key problem area is that supporting infrastructure remains underdeveloped, such as vertiport locations and power supply. eVTOLs will need a multidisciplinary approach, combining urban planning, energy management, vertiport construction, and regulatory expertise before they can take off.  

 

For our book review today, Aditi Phadnis tackles 'India Inked: Elections in the World’s Largest Democracy' by Poonam Agarwal, who extensively covered the electoral bonds sleight-of-hand: what was supposed to keep political donors at arm's length from political parties had the opposite effect, thanks to finely-hidden alphanumeric codes. The book goes beyond just electoral bonds, though, and is an account of the evolution of India’s elections over the decades, shining a light on how democracy can be subverted. More importantly, she also asserts that press freedom in India is in danger largely because of the other interests of media owners.