In India, which of the following review the independent regulators in sectors like telecommunications, insurance, electricity, etc.? 1. Ad Hoc Committee set up by the Parliament. 2. Parliamentary Department Related Standing Committee 3. Finance Commission 4. Financial Sector Legislative Reforms Commission 5. NITI Aayog Select the correct answer using the code given below.
Contents12
- A1 and 2
- B1, 3 and 4
- C3, 4 and 5
- D2 and 5
Show answer
Answer: (A) 1 and 2
The correct answer is (A) — 1 and 2.
Parliament reviews independent regulators through two mechanisms:
- Department-Related Standing Committees (permanent committees covering specific ministries)
- Ad Hoc Committees (temporary committees set up for specific tasks, like the JPC on 2G spectrum or the JPC on stock market scam).
The Finance Commission, FSLRC, and NITI Aayog do NOT have the role of reviewing independent regulators.
Tip: Parliamentary oversight of regulators happens through Standing Committees and Ad Hoc Committees — not through advisory bodies.
Parliamentary committees are the primary mechanism through which Parliament exercises oversight over independent regulators like TRAI, IRDAI, and CERC.
Major regulatory failures in telecom and financial sectors in the 2000s led to increased parliamentary scrutiny through Joint Parliamentary Committees, making this oversight function more visible.
The question tests whether students understand the difference between parliamentary oversight bodies (which have constitutional review powers) versus advisory bodies like NITI Aayog and Finance Commission (which only make recommendations).
Parliamentary Department Related Standing Committees
Indian Polity Parliamentary Department Related Standing Committee Standing Committee
Department Related Standing Committees: Structure & Role in Regulatory Oversight
24 Department Related Standing Committees — 17 in Lok Sabha, 7 in Rajya Sabha
Each committee covers 2-3 ministries and has 31 members (21 LS + 10 RS)
Permanent committees that review independent regulators like TRAI, IRDA, CERC
Powers include examining demands for grants, bills, and annual reports of ministries
Department Related Standing Committees are permanent parliamentary committees established to provide continuous oversight of government ministries and their attached bodies, including independent regulators.
Key mechanism: Each ministry falls under one specific committee's jurisdiction, ensuring systematic review of regulatory bodies like TRAI (telecommunications), IRDA (insurance), and CERC (electricity).
Committee Structure & Composition
Aspect | Lok Sabha Committees | Rajya Sabha Committees | Combined |
|---|---|---|---|
Number of Committees | 17 | 7 | 24 total |
Members per Committee | 21 | 10 | 31 total |
Term Duration | 1 year | 1 year | Reconstituted annually |
Chairperson | Usually ruling party MP | Usually ruling party MP | Elected by committee |
Powers in Regulatory Oversight
Examine annual reports of independent regulators and their performance
Review budget allocations for regulatory bodies through Demands for Grants
Summon officials from regulators like SEBI, RBI, TRAI for questioning
Make recommendations on regulatory policies and their implementation
Monitor compliance with parliamentary directives by these bodies
Question connection: This PYQ tested knowledge that Parliament exercises oversight of independent regulators primarily through these permanent committee structures, not through one-time advisory bodies like Finance Commission or NITI Aayog.
Trap: Confusing Department Related committees with Financial committees (PAC, COPU)
Trap: Thinking NITI Aayog reviews regulators — it only provides policy advice, not oversight
Remember: 24 total committees (17 LS + 7 RS), not equal distribution
Parliamentary Ad Hoc Committees
Indian Polity Ad Hoc Committee
Ad Hoc Committees: Temporary Bodies for Specific Regulatory Issues
Temporary committees set up for specific tasks or investigations
Include famous Joint Parliamentary Committees (JPCs) on major scandals
Can review independent regulators on specific issues or failures
Dissolved automatically once they submit their report
Ad Hoc Committees are temporary parliamentary bodies created to investigate specific issues, including failures or controversies involving independent regulators.
Unlike permanent Standing Committees, these are task-specific and dissolve once their mandate is complete.
Famous Ad Hoc Committees on Regulatory Issues
Committee | Year | Regulatory Issue | Key Finding |
|---|---|---|---|
JPC on 2G Spectrum | 2011 | TRAI spectrum allocation | Policy failures in telecom regulation |
JPC on Stock Market Scam | 1992 | SEBI oversight failure | Harshad Mehta securities manipulation |
JPC on Pesticides | 2004 | Food safety regulation | Regulatory gaps in food standards |
Committee on Banking | 2018 | RBI supervision issues | PNB fraud and banking oversight |
Ad Hoc Committee Process
%%{init: {"flowchart": {"wrappingWidth": 460}}}%%
flowchart TD
s1["`**Issue Emerges**
Regulatory failure or controversy surfaces`"]
s2["`**Motion Passed**
Parliament votes to constitute ad hoc committee`"]
s3["`**Investigation**
Committee examines records, summons officials`"]
s4["`**Report Submitted**
Findings and recommendations presented to Parliament`"]
s5["`**Committee Dissolved**
Temporary body ceases to exist`"]
s1 --> s2
s2 --> s3
s3 --> s4
s4 --> s5Question connection: The PYQ recognized that Parliament can set up temporary committees to investigate specific regulatory failures — this provides flexibility beyond the routine oversight by Standing Committees.
Remember: Ad Hoc committees are temporary, Standing committees are permanent
JPC examples: 2G Spectrum (telecom), Stock Market Scam — both involved regulatory oversight
Trap: Thinking only Standing Committees can review regulators — Ad Hoc can too
Finance Commission
Indian Polity Finance Commission
Finance Commission: Constitutional Role vs Regulatory Oversight
Constitutional body under Article 280 for Center-State financial relations
Does NOT review independent regulators — focuses on tax devolution
15th Finance Commission (2020-25) currently operational
5-member body appointed every 5 years by President
The Finance Commission is a constitutional body that deals with Center-State financial relations, particularly tax sharing between Union and States.
Critical distinction: It has no role in reviewing independent regulators like TRAI or SEBI — that's Parliament's job through committees.
Finance Commission vs Parliamentary Oversight
Aspect | Finance Commission | Parliamentary Committees |
|---|---|---|
Constitutional Basis | Article 280 | Article 105, 118 |
Primary Role | Tax devolution to States | Oversight of ministries/regulators |
Composition | 5 members, appointed by President | 31 members per Standing Committee |
Term | 5 years | 1 year (reconstituted annually) |
Regulatory Oversight | NO — focuses on fiscal federalism | YES — primary oversight mechanism |
Actual Functions of Finance Commission
Recommend tax sharing formula between Center and States (currently 41% to States)
Grant-in-aid recommendations for States with special needs
Local body finances — funds for Panchayats and Municipalities
Debt consolidation and fiscal deficit targets for States
Major trap: Finance Commission sounds like it reviews financial regulators — it doesn't
Remember: FC deals with Center-State money sharing, not regulatory oversight
Current: 15th Finance Commission (2020-25), Chairman NK Singh
NITI Aayog
Indian Polity NITI Aayog
NITI Aayog: Policy Advisory vs Regulatory Oversight
Policy think tank established in 2015, replacing Planning Commission
Advisory body — provides policy recommendations, not oversight
Cannot review independent regulators — lacks oversight powers
Chaired by PM with Vice-Chairman as operational head
NITI Aayog is the government's premier policy think tank that replaced the Planning Commission in 2015.
Key limitation: It's an advisory body that makes policy recommendations — it cannot review or oversee independent regulators like SEBI, TRAI, or IRDA.
NITI Aayog vs Parliamentary Oversight Powers
Function | NITI Aayog | Parliamentary Committees |
|---|---|---|
Nature | Advisory think tank | Constitutional oversight body |
Powers over Regulators | None — only policy advice | Summon, examine, recommend |
Accountability | Reports to PM/Cabinet | Accountable to Parliament |
Composition | Ex-officio + special invitees | Elected MPs only |
Mandate | Policy formulation | Performance review and oversight |
Actual Functions of NITI Aayog
Policy coordination between Center, States, and local governments
Strategic planning for long-term national development
Program evaluation of government schemes (not regulatory oversight)
Research and innovation through partnerships with academic institutions
International cooperation on development issues
Question connection: This option was a classic distractor — NITI Aayog sounds authoritative and deals with policy, but it's purely advisory and has no power to review independent regulators.
Major trap: NITI sounds like it has regulatory oversight powers — it's only advisory
Remember: Replaced Planning Commission in 2015, but with much limited scope
Composition confusion: Has ex-officio members (ministers), not elected MPs like committees