Regulators must adhere to the same standards of transparency they demand from regulated entities, Chief Economic Advisor V. Anantha Nageswaran said on Wednesday. 

Speaking at the Global Economic Policy Forum 2024, Nageswaran emphasised the need for accountability among regulators, noting that they must remain mindful of the limits of their “unelected power”.

He pointed out that regulators, by definition, are less accountable than elected authorities and urged for transparency to be equally applied to both. Regulators must be open in information sharing and be ready to spell out goals of proposed regulations etc.

Nageswaran highlighted that while some sectors can self regulate, the interconnected nature of financial systems calls for vigilant oversight to protect economic stability. 

He was addressing a session on the ‘Future of Regulation: Balancing Innovation and Risk’. The second edition of GEPF has been jointly organised by the Department of Economic Affairs and CII.

Balancing regulation and innovation

Addressing the gathering in virtual mode, Debasish Panda, Chairman Insurance Regulatory and Development Authority of India (IRDAI) laid the overall foundation of insurance which rests on making insurance simple, available, accessible, and most importantly, affordable. 

He concluded the session by addressing that regulations are designed to balance innovation and risk, ensuring that the business ecosystem grows responsibly without compromising stability.

K Rajaraman, Chairperson, International Financial Services Centres Authority (IFSCA) highlighted how regulation should guide and provide overall structure while allowing room for growth. This balance is essential for fostering innovation over the next 25 years as part of Amrit Kaal. He emphasised the importance of balancing regulation with innovation, particularly in a globalised and interconnected economy. Rajaraman highlighted the necessity for dynamic and adaptive regulatory frameworks, which avoid stifling growth while ensuring risk mitigation.

Janmejaya Sinha, Chairman of BCG India, emphasised the need for a thorough discussion on the cost and benefits of regulation, stressing that finding the right balance is crucial.