Book review: Devesh Kapur and Madhav Khosla (Eds.), Regulation in India: Design, Capacity, Performance

Published date01 December 2021
Date01 December 2021
AuthorJohn Echeverri-Gent
Subject MatterBook Reviews
Book Reviews
Devesh Kapur and Madhav Khosla (Eds.), Regulation in India: Design, Capacity, Performance (New Delhi:
Bloomsbury, 2019), 407 pp. `739. ISBN 978-93-88630-66-5.
The rise of India’s ‘new regulatory’ state has brought about profound changes in its political economy.
As independent regulatory agencies spread across India’s economic sectors, economic governance
increasingly occurs through rule-based regulation. A growing share of authority over economic regulation
has been transferred to unelected officials with presumably greater expertise but less public accountability.
The judiciary’s role in adjudicating economic disputes has increased because it is one of the few means
for holding regulatory authorities accountable. Ultimately, authority over economic regulation and
policy has become more decentralized and fragmented.
Regulation in India: Design, Capacity, Performance provides an extensive analysis of developments
in Indian regulation since 1991. Its encyclopaedic approach includes chapters presenting detailed case
studies of regulatory developments in the banking, securities, infrastructure, telecom, renewable energy,
environment, food, big data sectors and competition law. As one might expect from a book in the Hart
Studies in Comparative Public Law series, it also illuminates how constitutional law and India’s legal
system have shaped economic regulation. Several chapters offer provocative insights about the challenges
and potential payoffs of strengthening India’s administrative law.
The volume’s analysis of financial sector regulation is especially welcome. Chapters by Umakanth
Varonttil and by Neel Maitra provide critical insights about the Securities and Exchange Board of India,
arguably India’s most developed regulatory agency. At a time when Indian banks have been plagued by
scandals and are burdened with mounting non-performing assets, Suyash Rai’s incisive analysis shows
the limits of the Reserve Bank of India’s regulatory capacity. It also elaborates how the government’s
repeated recapitalization of public sector banks creates moral hazard that encourages them to continue
making commercially unviable loans.
The volume’s discussion of administrative law is a great strength. The chapter by Roy, Shah,
Shrikrishna and Sundaresan makes the novel argument that administrative law can increase state capacity
by incentivizing government officials to be accountable, motivating them to enhance their competence
and creating feedback loops to improve institutional performance. India’s pre-reform legal system
bequeathed weak administrative law better suited for government ministries than independent regulatory
agencies who, as Krishnan and Burman (p. 339) point out, are distinguished from the ministries because
they have substantial ‘legislative (regulation-making), executive (monitoring and supervision) and
judicial (issuing orders) power’. The need for effective administrative law is even more urgent because
parliamentary legislation authorizes regulatory agencies to establish their own administrative procedures
and courts defer to the agencies’ legislative and executive actions. The chapters of Regulation in
India make a compelling case for strengthening India’s administrative law in order to ensure that
Studies in Indian Politics
9(2) 291–303, 2021
© 2021 Lokniti, Centre for the
Study of Developing Societies
Reprints and permissions:
DOI: 10.1177/23210230211043075

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