Jaipur 22 December 2003

“The process of liberalisation did not diminish the role of economic governance in the country as unregulated corporations can harm people. The biggest challenge therefore is to set up independent regulatory institutions, which can withstand pressures from political and business lobbies. The NGOs can play an important role in the process. They can raise awareness and build pressure to enhance accountability of the regulators,” observed D. R. Mehta, former chairman of the Securities and Exchange Board of India, the capital market regulator of the country. He was speaking at a national seminar on “The Role of the Civil Society Organisations in Economic Governance” held at Jaipur on 19th – 21st December 2003.

The seminar was organised by the city-based research and advocacy group, Consumer Unity & Trust Society (CUTS). The seminar was attended by the representatives of several civil society groups from different parts of the country. A number of experts on regulatory issues spoke in the seminar.

Speaking at the occasion, Pradeep S Mehta, the secretary general of CUTS, emphasised that if India needs to realise the goal of a developed country living standard by the year 2020, we need to look beyond the eight percent growth target. This is difficult but not impossible and the third sector, i.e., the NGOs can significantly contribute to the achievement of the goal.

The seminar participants were unanimous in recognising the importance of efficient and independent regulators. However, concerns were expressed that the regulatory authorities have become roosting grounds for retired bureaucrats and judges which is harming the interest of the country. Referring to the controversy on the issue of the appointments at the Competition Commission of India, it was lamented that the issue has been made to appear like a turf war between the bureaucrats and the judges while the real issue that is at stake is ignored. Regulators need to be adequately trained and appropriately oriented and whether they came from bureaucracy, judiciary or some other background is totally irrelevant.

Grave concerns were expressed on the state of health and education in the country as well as the state of infrastructure, particularly electricity, roads and water. It was observed that India is one of the most vulnerable countries, as 90 percent of the people do not have any protection against health risks. Moreover, contrary to popular belief, an overwhelming majority relies on private health providers, who remain unregulated exposing the consumers to the menaces like over-medication and irrational drug use, unnecessary testing and surgical operations, prescription of more expensive drugs etc.

An urgent need for far reaching reforms in electricity with effective regulatory mechanism that puts consumer interests at par with producers’ interest was felt necessary. However, on water, the participants were not in favour of large-scale privatisation or sweeping changes, even though some reforms were felt to be necessary.

Good governance was considered to be the key. We need to redefine the role of government and the attributes of good governance. “India maintains one of the most expensive governance system for the size of its GDP. What we spend in maintaining the system is probably far too more than what we get from it”, observed Prof. Vijay Shankar Vyas, who delivered the closing address in the seminar.