The proposed steep hike in salaries of top regulators is sufficient incentive for both private sector executives and serving bureaucrats to join as watchdogs.
"If the government agrees to pay Rs 200,000 plus perks, it is a very good take-home salary. It will be sufficient to attract the best talent," said a top official with a regulatory agency.
While former chairman of the Telecom Regulatory Authority of India, Pradip Baijal, was not sure if private sector executives would be able to deliver in a government set-up, he said, "There would be very few who, given a chance, will not quit their government jobs to head a regulatory body. The job of a regulator is far more complex and rewarding than that of a secretary to the government."
The Sixth Pay Commission has recommended that the remuneration of chairpersons of regulatory agencies like the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority, the Telecom Regulatory Authority of India, the Central Electricity Regulatory Commission and the Competition Commission of India be hiked to Rs 300,000 if they do not avail of perks like cars and housing. It proposed a salary of Rs 250,000 for the members of these bodies.
While recommending a more transparent system where a panel interviews candidates, the Pay Commission has said the secretary concerned should not be involved in the process as the ministry is a stakeholder.
Serving bureaucrats should be eligible for higher remuneration only if they resign and are chosen through the selection process, it has said.
"Government employees may be considered for a higher package provided they have not worked in the sector concerned during the preceding two years," it said.
Though the pay panel's mandate was to deal with all officers and employees of regulatory bodies set up under an Act of Parliament, in December 2006, this was amended to cover only the members. The Reserve Bank of India was kept outside the ambit.
The chairman of a key regulatory agency told Business Standard, "It is a good salary, but I don't think private sector experts will come only for money. They will join for the power and prestige involved with such a job. But there may be some issues. Will such a person be allowed to return and work in the companies that he has regulated during his stint? Also, since most regulatory work involves dealing with the government at various hierarchical positions, a private sector person may find it difficult to negotiate the bureaucratic maze. No amount of technical expertise can compensate for the institutional and procedural understanding acquired by bureaucrats during their long careers."
The pay panel said the member or a chairman of an agency should not be permitted to seek re-employment in the same sector for a period of two years.
In the US, for instance, the heads of regulatory institutions from the private sector face restrictions on joining related companies later.
A former regulator said the government also needed to improve the quality of secretarial staff if it wanted to get more talented people to work for the regulatory agencies.
"Regulators just don't work on their own, they work with a secretariat. We have had several rounds of discussions with the government but nothing has come out of it so far. There is a need to build a cadre of people to run the secretariat. The focus on chairman and members only addresses a part of the problem," said an official.
