What is independent regulation?
Independent regulation (also called ‘new-style’ regulation here) has developed into an alternative form of governance, especially in infrastructure and financial services. Its origins are in the US but it has been successfully used in the UK for electricity and gas and has extended itself to many other countries. This chapter tries to define what is meant by ‘independence’ and why it is a desired characteristic in regulation, especially of infrastructure. It discusses some characteristics of independent regulation and the alternative models that have developed. It examines the policy content of regulation and the extent of policy-making that regulators must also undertake. It discusses the comparative features of some other such agencies in India and makes a specific comparison of the features relating to electricity regulatory commissions in the newly passed Electricity Act, 2003, versus others like the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority, and the Telecom Regulatory Authority of India. It also looks at the different models of independent electricity regulation in the UK and the US.