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ARC 9threport Ch5

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Social Capital A Shared Destiny

l)

The Micro Financial Sector (Development and Regulation) Bill, 2007


needs to be amended to include the following suggestions:i. The scope of Micro-finance Services should be substantially widened
to cover credit / savings, insurance, pension services, money transfer,
issue / discount of warehouse receipts and future / option contracts
for agricultural commodities and forest produce.
ii. Nidhis registered under Section 620A of the Companies Act,
and Producer Companies should be brought under the new
legislation.
iii. The activities of Section 25 Companies to the extent they concern
micro-financial services as described under the proposed Bill should
also be brought under the purview of this legislation. However, for
their management and other functions, they will continue to be
governed by the provisions of the Companies Act.
iv. The issue of interest rate charged by the MFIs should be left to the
Regulatory Authority which is being created under the proposed
Bill.
iv. It should be ensured that if MFIs are allowed to handle thrift /
savings and money transfer services, they would do so only as
business correspondents of commercial Banks. Other concerns as
stated in Para 4.6.9.9.2 also need to be considered.

m) Micro-finance institutions covered under the proposed law should be


kept out of the purview of the State laws on money-lending.

SELF-REGULATORY AUTHORITIES

5.1 Introduction
5.1.1 The Self-Regulatory Authority of a profession means a select Body of its members
which is responsible for growth and development of the profession in the background of
its responsibility towards society and State. The functions of such a Self-Regulatory Body
may include: (i) issues of professional education: development of curriculum, setting up of
teaching standards, institutional infrastructure, recognition of degrees etc. and (ii) matters
connected with licensing, and ethical conduct of the practitioners.
5.1.2 Currently, there are six major professional Bodies operating in India each having been
formed under a specific law.
Bar Council of India (BCI) formed under the Advocates Act, 1961
Medical Council of India (MCI) formed under the Indian Medical Council Act, 1956
Institute of Chartered Accountants of India (ICAI) formed under the Chartered
Accountants Act, 1949
Institute of Cost and Works Accountants of India (ICWAI) formed under the Cost and
Works Accountants Act, 1959
Institute of Company Secretaries of India (ICSI) formed under the Company Secretaries
Act, 1980
Council of Architecture (COA) formed under the Architects Act, 1972
5.1.3 Then, there are organisations like the Institution of Engineers which have been formed
purely by voluntary action by respective members of the profession. They do not have any
statutory background.
5.1.4 All the above professions are vital for society and the economy of a country. In fact,
the number of medical practitioners, lawyers, chartered accountants, engineers and other

112

113

Social Capital A Shared Destiny

Self-Regulatory Authorities

professionals in a society per one lakh population is one of the indices on which the status of
a nations advancement is measured. As per an estimate, the number of registered lawyers in
the country in 2006 was 8.47 lakhs, while the corresponding figures for doctors, engineers,
chartered accounts, company secretaries, cost accountants and architects were 6.59 lakhs,
4.0 lakhs, 1.30 lakhs, 0.17 lakh, 0.13 lakh and 0.02 lakh22 respectively.

was constituted in 2005 with a mandate to prepare a blueprint for transforming the
country into a knowledge society has gone into issues of higher education in the country
(e.g. management, law, and medicine). One of its major recommendations is that professional
education should be taken away from the domain of the existing Regulatory Bodies. The
NKC has observed that,

5.1.5 In the Indian context, besides regulating the domain of professional education and
setting standards for the conduct and behaviour of the members, these Self-Regulatory
Bodies have often played a significant role as technical advisers to the government in
conceptualizing, formulating and implementing policies and standards for providing
important public services to the citizens (e.g. on health care and justice delivery).

The present regulatory system in higher education is flawed in many respects. The
barriers to entry are too high. The system of authorizing entry is cumbersome. And there
are extensive rules after entry, as almost every aspect of an institution is regulated from
fees to curriculum. The other regulators, say in the sphere of professional education, are
often inconsistent in their adherence to principles. The existing regulatory framework
constrains the supply of good institutions, excessively regulates existing institutions in
the wrong places, and is not conducive to innovation or creativity in higher education.
The challenge is therefore to design a regulatory system that increases the supply of good
institutions and fosters accountability in those institutions. An independent regulator
has to be the cornerstone of such a system. The system as a whole is over regulated and
under-governed.

5.1.6 Trust between Professionals and Citizens


5.1.6.1 In general, there is a relationship of deep trust between a professional and his client. A
professional practitioner is in a position to have access to the most personal details of a person
and hence he is obliged to act in consonance with the principles of beneficence and justice
to justify this trust. The professionals need to maintain high standards of practice and show
respect for professional ethical values. The trust also implies that they update their knowledge,
skill and ability at periodic intervals in order to deliver their services competently.
5.1.6.2 Formed with enthusiasm and vision, the Regulatory Authorities worked with zeal
and interest in the initial years of their existence. Though, commitment to self-interest
may have been there in some form or the other on their agenda, the level of professional
competence and conduct was adequately high in the early years of Independence and by
and large, the medical profession, engineers, lawyers and others conducted themselves
with great responsibility and professionalism. But in recent years, the drift in almost all
professions towards self-interest has become markedly pronounced. The general perception
is that instead of being self-regulatory, Regulatory Bodies have become self-promoting
lobbies running to the rescue of delinquents, starting agitations against any action that
is taken, organising strikes and hardly taking steps to uphold standards or action against
professional misconduct.
Lawyers are the only persons in whom ignorance of the law is not punished.
Jeremy Bentham
5.2 Separating Professional Education from Self-Regulatory Authorities
5.2.1 Currently, one of the major tasks of Self-Regulatory Authorities is to manage and
regulate professional education. The National Knowledge Commission (NKC) which
114

5.2.2 In this sequence, the National Knowledge Commission has recommended establishment
of an Independent Regulatory Authority for Higher Education (IRAHE). The IRAHE must
be at an arms length from the government and independent of all stakeholders including
the concerned Ministries of the government.
The IRAHE would have to be established by an Act of Parliament, and would be
responsible for setting the criteria and deciding on entry.
It would be the only agency that would be authorized to accord degree-granting
power to higher education institutions.
It would be responsible for monitoring standards and settling disputes.
It would apply exactly the same norms to public and private institutions, as it
would to domestic and international institutions.
It would be the authority for licensing accreditation agencies.
5.2.3 In the proposed new environment, the role of the UGC would need to be re-defined,
so that it remain confined to (a) disbursement of grants, and (b) maintenance of public
institutions. The All India Council for Technical Education (AICTE) will need to be
abolished while the functions of the Medical Council of India (MCI) and the Bar Council
of India (BCI) will be limited to their role as Professional Associations. Separate Standing
115

Source: Compiled from Annual Reports of MCI, BCI etc. and other sources.

22

Social Capital A Shared Destiny

Self-Regulatory Authorities

professionals in a society per one lakh population is one of the indices on which the status of
a nations advancement is measured. As per an estimate, the number of registered lawyers in
the country in 2006 was 8.47 lakhs, while the corresponding figures for doctors, engineers,
chartered accounts, company secretaries, cost accountants and architects were 6.59 lakhs,
4.0 lakhs, 1.30 lakhs, 0.17 lakh, 0.13 lakh and 0.02 lakh22 respectively.

was constituted in 2005 with a mandate to prepare a blueprint for transforming the
country into a knowledge society has gone into issues of higher education in the country
(e.g. management, law, and medicine). One of its major recommendations is that professional
education should be taken away from the domain of the existing Regulatory Bodies. The
NKC has observed that,

5.1.5 In the Indian context, besides regulating the domain of professional education and
setting standards for the conduct and behaviour of the members, these Self-Regulatory
Bodies have often played a significant role as technical advisers to the government in
conceptualizing, formulating and implementing policies and standards for providing
important public services to the citizens (e.g. on health care and justice delivery).

The present regulatory system in higher education is flawed in many respects. The
barriers to entry are too high. The system of authorizing entry is cumbersome. And there
are extensive rules after entry, as almost every aspect of an institution is regulated from
fees to curriculum. The other regulators, say in the sphere of professional education, are
often inconsistent in their adherence to principles. The existing regulatory framework
constrains the supply of good institutions, excessively regulates existing institutions in
the wrong places, and is not conducive to innovation or creativity in higher education.
The challenge is therefore to design a regulatory system that increases the supply of good
institutions and fosters accountability in those institutions. An independent regulator
has to be the cornerstone of such a system. The system as a whole is over regulated and
under-governed.

5.1.6 Trust between Professionals and Citizens


5.1.6.1 In general, there is a relationship of deep trust between a professional and his client. A
professional practitioner is in a position to have access to the most personal details of a person
and hence he is obliged to act in consonance with the principles of beneficence and justice
to justify this trust. The professionals need to maintain high standards of practice and show
respect for professional ethical values. The trust also implies that they update their knowledge,
skill and ability at periodic intervals in order to deliver their services competently.
5.1.6.2 Formed with enthusiasm and vision, the Regulatory Authorities worked with zeal
and interest in the initial years of their existence. Though, commitment to self-interest
may have been there in some form or the other on their agenda, the level of professional
competence and conduct was adequately high in the early years of Independence and by
and large, the medical profession, engineers, lawyers and others conducted themselves
with great responsibility and professionalism. But in recent years, the drift in almost all
professions towards self-interest has become markedly pronounced. The general perception
is that instead of being self-regulatory, Regulatory Bodies have become self-promoting
lobbies running to the rescue of delinquents, starting agitations against any action that
is taken, organising strikes and hardly taking steps to uphold standards or action against
professional misconduct.
Lawyers are the only persons in whom ignorance of the law is not punished.
Jeremy Bentham
5.2 Separating Professional Education from Self-Regulatory Authorities
5.2.1 Currently, one of the major tasks of Self-Regulatory Authorities is to manage and
regulate professional education. The National Knowledge Commission (NKC) which
114

5.2.2 In this sequence, the National Knowledge Commission has recommended establishment
of an Independent Regulatory Authority for Higher Education (IRAHE). The IRAHE must
be at an arms length from the government and independent of all stakeholders including
the concerned Ministries of the government.
The IRAHE would have to be established by an Act of Parliament, and would be
responsible for setting the criteria and deciding on entry.
It would be the only agency that would be authorized to accord degree-granting
power to higher education institutions.
It would be responsible for monitoring standards and settling disputes.
It would apply exactly the same norms to public and private institutions, as it
would to domestic and international institutions.
It would be the authority for licensing accreditation agencies.
5.2.3 In the proposed new environment, the role of the UGC would need to be re-defined,
so that it remain confined to (a) disbursement of grants, and (b) maintenance of public
institutions. The All India Council for Technical Education (AICTE) will need to be
abolished while the functions of the Medical Council of India (MCI) and the Bar Council
of India (BCI) will be limited to their role as Professional Associations. Separate Standing
115

Source: Compiled from Annual Reports of MCI, BCI etc. and other sources.

22

Social Capital A Shared Destiny

Self-Regulatory Authorities

Committees will be constituted within the structure of the IRAHE to take care of the above
functions in different streams.

5.2.6 The main argument behind the recommendations of the National Knowledge
Commission is that in the current era, the curriculum of a particular stream does not cater
only to the traditional sector of the profession, but also meets the needs of other competence
areas. For example, our law colleges / institutes do not prepare students only for careers in
the Bar or in the judiciary. The curriculum also trains them for other equally important
functions in society such as those of policy makers, business advisers, academicians, activists
and public officials. The expansion of trade and commerce and the resulting environment
of global integration have brought into the picture a variety of complex commercial issues
which require ability and knowledge of the highest calibre.

5.2.4 The subject of legal education was discussed in detail by the Law Commission of
India in its 184th Report on The legal education and professional training and proposals
for amendments to the Advocates Act, 1961 and the University Grants Commission Act,
1956, December 2002. The Law Commission had discussed the suggestion to form an All
India Legal Education Council on the model of All India Council for Technical Education
(AICTE). In the new dispensation, the BCI would be responsible only for regulating entry
into the profession and maintenance of standards.
5.2.5 Section 7(1)(h) of the Advocates Act, 1961 enables the Bar Council to lay down
standards of legal education in the country in consultation with the Universities. The Law
Commission was of the view that generally in the matter of standards of legal education, the
UGC or the Universities may have primacy but in the matter of standards of legal education
for those who will practice in courts, the primacy of the Bar and the Judiciary remained
undisputed. The Commission also quoted a similar view expressed by Shri M.C. Setalved
in the 14th Report of the Law Commission (1958). If legal education is kept totally out of
the purview of the BCI, it may not be able to prescribe a definite course of legal education
which can meet the needs of the Bar.
We have already seen how in England, professional legal education and the admission to
the profession are controlled by a body consisting exclusively of professional men. There is no
reason why a similar control and regulation should not be vested in the profession in India.
Co-ordination between the bodies regulating professional training and the Universities with
a view to ensuring minimal standards can be achieved in the manner indicated above. In
our view, the Legal Education Committee of the All India Bar Council may be empowered to
keep itself in touch with the standards of legal education imparted at the various Universities
by visits and inspection as in the case of the medical and dental professions or as is done
by the American Bar Association in the case of the American Law Schools. If the Council
or its Committee is of the view that the standards prescribed by a particular University
in legal education are not adequate or that institutions established by it or affiliated to
it for imparting legal education are not well-equipped or properly run, it may decide to
refuse admission of the graduates of that University, to the professional examination till the
University has taken steps to reach the minimum standards.
The 14th Report of the Law Commission (1958) presided over by Shri M.C. Setalvad

116

5.2.7 The overall tenor of law and practice now, calls for serious academic research and
enquiry.
5.2.8 Medical education too is a field in which the standard of research and knowledge has
reached a high level. Designing curriculum, setting standards and managing research has
become an area of high scientific pursuit which can be managed only by people of excellence.
The current system of elections discourages the entry of high calibre individuals into the
Professional Bodies. There seems to be strong merit in the argument that a separate Body
dominated largely by persons with specialized knowledge in their respective field should
be put in charge of medical education.
5.2.9 In view of the above, the Commission agrees with the stand of the National Knowledge
Commission that the subject of professional education should be separated from the domain
of the existing Regulators. However, it is felt that creating a high powered monolith at the
national level, IRAHE, in overall command of all the streams of professional education, will
go against the very principle of decentralisation an essential element of good governance.
Secondly, the NKC has proposed to create separate Standing Committees in IRAHE to look
after different streams, one each for law, medicine, management, chartered accountantancy,
pharmacy, nursing etc. They will be doing the same work as is currently being done by
BCI, MCI, AICTE and others (planning, formulation and maintenance of norms and
standards, quality assurance through accreditation, funding in priority areas, monitoring
and evaluation, maintaining parity of certification / awards and ensuring coordinated and
integrated development and management of the stream). The Commission believes that
the interests of higher education will be better served, if instead of creating one monolithic
body, separate institutions are created for each of the professional field of study (medicine,
law, management, technology etc.).
5.2.10 The apex regulatory agencies one for each of the professional education
streams should be created by law. They could be called the National Standards and
117

Social Capital A Shared Destiny

Self-Regulatory Authorities

Committees will be constituted within the structure of the IRAHE to take care of the above
functions in different streams.

5.2.6 The main argument behind the recommendations of the National Knowledge
Commission is that in the current era, the curriculum of a particular stream does not cater
only to the traditional sector of the profession, but also meets the needs of other competence
areas. For example, our law colleges / institutes do not prepare students only for careers in
the Bar or in the judiciary. The curriculum also trains them for other equally important
functions in society such as those of policy makers, business advisers, academicians, activists
and public officials. The expansion of trade and commerce and the resulting environment
of global integration have brought into the picture a variety of complex commercial issues
which require ability and knowledge of the highest calibre.

5.2.4 The subject of legal education was discussed in detail by the Law Commission of
India in its 184th Report on The legal education and professional training and proposals
for amendments to the Advocates Act, 1961 and the University Grants Commission Act,
1956, December 2002. The Law Commission had discussed the suggestion to form an All
India Legal Education Council on the model of All India Council for Technical Education
(AICTE). In the new dispensation, the BCI would be responsible only for regulating entry
into the profession and maintenance of standards.
5.2.5 Section 7(1)(h) of the Advocates Act, 1961 enables the Bar Council to lay down
standards of legal education in the country in consultation with the Universities. The Law
Commission was of the view that generally in the matter of standards of legal education, the
UGC or the Universities may have primacy but in the matter of standards of legal education
for those who will practice in courts, the primacy of the Bar and the Judiciary remained
undisputed. The Commission also quoted a similar view expressed by Shri M.C. Setalved
in the 14th Report of the Law Commission (1958). If legal education is kept totally out of
the purview of the BCI, it may not be able to prescribe a definite course of legal education
which can meet the needs of the Bar.
We have already seen how in England, professional legal education and the admission to
the profession are controlled by a body consisting exclusively of professional men. There is no
reason why a similar control and regulation should not be vested in the profession in India.
Co-ordination between the bodies regulating professional training and the Universities with
a view to ensuring minimal standards can be achieved in the manner indicated above. In
our view, the Legal Education Committee of the All India Bar Council may be empowered to
keep itself in touch with the standards of legal education imparted at the various Universities
by visits and inspection as in the case of the medical and dental professions or as is done
by the American Bar Association in the case of the American Law Schools. If the Council
or its Committee is of the view that the standards prescribed by a particular University
in legal education are not adequate or that institutions established by it or affiliated to
it for imparting legal education are not well-equipped or properly run, it may decide to
refuse admission of the graduates of that University, to the professional examination till the
University has taken steps to reach the minimum standards.
The 14th Report of the Law Commission (1958) presided over by Shri M.C. Setalvad

116

5.2.7 The overall tenor of law and practice now, calls for serious academic research and
enquiry.
5.2.8 Medical education too is a field in which the standard of research and knowledge has
reached a high level. Designing curriculum, setting standards and managing research has
become an area of high scientific pursuit which can be managed only by people of excellence.
The current system of elections discourages the entry of high calibre individuals into the
Professional Bodies. There seems to be strong merit in the argument that a separate Body
dominated largely by persons with specialized knowledge in their respective field should
be put in charge of medical education.
5.2.9 In view of the above, the Commission agrees with the stand of the National Knowledge
Commission that the subject of professional education should be separated from the domain
of the existing Regulators. However, it is felt that creating a high powered monolith at the
national level, IRAHE, in overall command of all the streams of professional education, will
go against the very principle of decentralisation an essential element of good governance.
Secondly, the NKC has proposed to create separate Standing Committees in IRAHE to look
after different streams, one each for law, medicine, management, chartered accountantancy,
pharmacy, nursing etc. They will be doing the same work as is currently being done by
BCI, MCI, AICTE and others (planning, formulation and maintenance of norms and
standards, quality assurance through accreditation, funding in priority areas, monitoring
and evaluation, maintaining parity of certification / awards and ensuring coordinated and
integrated development and management of the stream). The Commission believes that
the interests of higher education will be better served, if instead of creating one monolithic
body, separate institutions are created for each of the professional field of study (medicine,
law, management, technology etc.).
5.2.10 The apex regulatory agencies one for each of the professional education
streams should be created by law. They could be called the National Standards and
117

Social Capital A Shared Destiny

Self-Regulatory Authorities

Quality Council for Law, National Standards and Quality Council for Medicine, National
Standards and Quality Council for Management and so on. It needs to be ensured that
there is uniformity in their composition and structure. In order to ensure transparency and
objectivity in the functions of these Councils, the law should provide a clear description
of their functions, powers and procedures to be adopted. The Commission is also of the
view that these Councils need not act as Regulators in the classical sense as they will have
no licensing functions. They should be entrusted only with the task of laying down norms,
standards and parameters for (a) setting up new institutions, (b) designing / updating
curriculum, (c) faculty improvement, (d) carrying out research / innovation, and (e) other
key issues concerning the stream. While constituting these Councils, the law should take
into consideration the following guiding principles:

5.2.11 With an enhanced role for the Universities, as proposed in paragraph 5.2.10 above,
there will be need to introduce substantial reforms in the higher education sector particularly
with regard to number and size of the Universities, curriculum, assessment, research,
faculty, finances, infrastructure and governance. The National Knowledge Commission
has made important recommendations in this regard which should be examined by the
government and implemented on priority. The Commission would like to particularly
highlight and endorse the recommendation of the NKC regarding appointment of Vice
Chancellors. The process of appointment should be free from direct or indirect interference
of the government. Once appointed, Vice Chancellors need to have a tenure of six years.
They should have adequate authority and flexibility to govern the Universities with the
advice and consent of the Executive Council.

(1) Such Councils should have full autonomy.


(2) The highest policy and decision making Body of these Councils should have a
majority of independent members, and preferably no more than 2 or 3 drawn
from government, who could be there in ex-officio capacity.
(3) These Councils should have a strong and effective grievance redressal
mechanism.
(4) The Councils should be accountable to Parliament and their Reports, should be
placed before the House annually. In addition, there should be strong norms
for suo-motu disclosures under the RTI Act.

5.2.12 There has been an emergence of strong private initiative in the education sector and
several institutions of learning have been set up for providing high quality education. This
underscores the need for establishment of stronger ties between educational institutions
in the private and public sectors through appropriate mechanism including exchange of
faculty. This would mutually reinforce the comparative strength of these two sectors.
5.2.13 Recommendations:
a)

Professional education should be taken away from the domain of the existing
Regulatory Bodies and handed over to specially created agencies one for
each of the streams of higher/professional education. These Bodies may
be called National Standards and Quality Council for Medicine, National
Standards and Quality Council for Management etc. After this bifurcation,
the work of the existing Regulatory Bodies would remain confined to issues
concerning registration, skill upgradation and management of professional
standards and ethics. On creation of these separate Councils, the AICTE
will stand abolished.

b)

Such Councils should be created by law and their role should be to lay
down norms, standards and parameters on issues concerning growth
and development of their stream viz. (a) setting up new institutions, (b)
designing/ updating curriculum, (c) faculty improvement, (d) carrying out
research / innovation, and (e) other key issues concerning the stream.

c)

The proposed law should take into consideration the following guiding
principles while constituting these Councils:

(5) One important function of these Councils will concern accreditation /


certification of institutions falling under their jurisdiction. Hence, each of
these National Councils should have a body of experts to advise it on these
matters.
(6) Some of the members of such Councils can be elected from among office
bearers of speciality Associations (e.g. Indian Medical Association), as these
members are elected by the practicing professionals in their individual
specialty.
Subject to the laid down norms, standards and parameters, the Universities/ Autonomous
Institutions would be free to take decision in all the above matters.
With enactment of a new law as proposed above and creation of separate National
Standards and Quality Councils for technology and management, the AICTE will need
to be abolished.
118

119

Social Capital A Shared Destiny

Self-Regulatory Authorities

Quality Council for Law, National Standards and Quality Council for Medicine, National
Standards and Quality Council for Management and so on. It needs to be ensured that
there is uniformity in their composition and structure. In order to ensure transparency and
objectivity in the functions of these Councils, the law should provide a clear description
of their functions, powers and procedures to be adopted. The Commission is also of the
view that these Councils need not act as Regulators in the classical sense as they will have
no licensing functions. They should be entrusted only with the task of laying down norms,
standards and parameters for (a) setting up new institutions, (b) designing / updating
curriculum, (c) faculty improvement, (d) carrying out research / innovation, and (e) other
key issues concerning the stream. While constituting these Councils, the law should take
into consideration the following guiding principles:

5.2.11 With an enhanced role for the Universities, as proposed in paragraph 5.2.10 above,
there will be need to introduce substantial reforms in the higher education sector particularly
with regard to number and size of the Universities, curriculum, assessment, research,
faculty, finances, infrastructure and governance. The National Knowledge Commission
has made important recommendations in this regard which should be examined by the
government and implemented on priority. The Commission would like to particularly
highlight and endorse the recommendation of the NKC regarding appointment of Vice
Chancellors. The process of appointment should be free from direct or indirect interference
of the government. Once appointed, Vice Chancellors need to have a tenure of six years.
They should have adequate authority and flexibility to govern the Universities with the
advice and consent of the Executive Council.

(1) Such Councils should have full autonomy.


(2) The highest policy and decision making Body of these Councils should have a
majority of independent members, and preferably no more than 2 or 3 drawn
from government, who could be there in ex-officio capacity.
(3) These Councils should have a strong and effective grievance redressal
mechanism.
(4) The Councils should be accountable to Parliament and their Reports, should be
placed before the House annually. In addition, there should be strong norms
for suo-motu disclosures under the RTI Act.

5.2.12 There has been an emergence of strong private initiative in the education sector and
several institutions of learning have been set up for providing high quality education. This
underscores the need for establishment of stronger ties between educational institutions
in the private and public sectors through appropriate mechanism including exchange of
faculty. This would mutually reinforce the comparative strength of these two sectors.
5.2.13 Recommendations:
a)

Professional education should be taken away from the domain of the existing
Regulatory Bodies and handed over to specially created agencies one for
each of the streams of higher/professional education. These Bodies may
be called National Standards and Quality Council for Medicine, National
Standards and Quality Council for Management etc. After this bifurcation,
the work of the existing Regulatory Bodies would remain confined to issues
concerning registration, skill upgradation and management of professional
standards and ethics. On creation of these separate Councils, the AICTE
will stand abolished.

b)

Such Councils should be created by law and their role should be to lay
down norms, standards and parameters on issues concerning growth
and development of their stream viz. (a) setting up new institutions, (b)
designing/ updating curriculum, (c) faculty improvement, (d) carrying out
research / innovation, and (e) other key issues concerning the stream.

c)

The proposed law should take into consideration the following guiding
principles while constituting these Councils:

(5) One important function of these Councils will concern accreditation /


certification of institutions falling under their jurisdiction. Hence, each of
these National Councils should have a body of experts to advise it on these
matters.
(6) Some of the members of such Councils can be elected from among office
bearers of speciality Associations (e.g. Indian Medical Association), as these
members are elected by the practicing professionals in their individual
specialty.
Subject to the laid down norms, standards and parameters, the Universities/ Autonomous
Institutions would be free to take decision in all the above matters.
With enactment of a new law as proposed above and creation of separate National
Standards and Quality Councils for technology and management, the AICTE will need
to be abolished.
118

119

Social Capital A Shared Destiny

Such Councils should have full autonomy.

ii.

The highest policy and decision making Body of these Councils


should have a majority of independent members, and preferably no
more than 2 or 3 drawn from government, who could be there in an
ex-officio capacity.

iii.

These Councils should have a strong and effective grievance redressal


mechanism.

iv.

The Councils should be accountable to Parliament and their


Report should be placed before the House annually. In addition,
there should be strong norms for suo-motu disclosures under
the RTI Act.

v.

Each of these Councils should have a body of experts to advise it


on accreditation / certification of institutions falling under their
jurisdiction.

vi.

Some of the members of such Councils can be elected from office


bearers of specialty Associations (e.g. Indian Medical Association),
as these members are elected by the practicing professionals in their
individual speciality.

d)

Within such norms, standards and parameters, the Universities/


Autonomous Institutions should be given full autonomy for setting up
and running institutions under their jurisdiction.

e)

The recommendations of the National Knowledge Commission regarding


reforms in the structure, governance and functioning of Universities should
be examined and implemented on priority. The process of appointment
of Vice Chancellors should be free from direct or indirect interference of
the government. Vice Chancellors should be given a fixed tenure and they
should have adequate authority and flexibility to govern the Universities
with the advice and consent of the Executive Council.

f )

120

i.

Self-Regulatory Authorities

5.3 Professional Updation


5.3.1 In the present era when technology and skills are changing rapidly, there is need for
professionals to update their knowledge and technical skills.
5.3.2 In order to provide specialised knowledge, ICAI offers short term post-qualification
courses in management accountancy, corporate affairs and tax management. It has
also introduced courses in information system audit, insurance and risk management,
international trade laws and WTO. It conducts periodic programmes on computer aided
auditing techniques.
5.3.3 ICAI through its Continuing Professional Education Directorate assumes the
responsibility of updating its members on professional issues arising out of new legislations,
technological changes and latest policies and pronouncements of the government
and other agencies / organisations. Continuing Professional Education (CPE) has been
made mandatory for ICAI members since 2003. Now, members will have to earn CPE
credit by undergoing such trainings. The MCI too is now facilititating CPE programmes
being hosted by some of the reputed medical institutions. It is providing financial
assistance to them.
5.3.4 But, many professions do not offer such quality enhancement programmes to their
members. For example, the only option available to a practicing lawyer is to join a twoyear Masters course in a University. The Commission is of the view that the Professional
Regulatory Bodies in conjunction with the respective National Quality and Standards
Council and the academic institutions should offer short duration courses of 4 to 6 weeks
to practicing professionals for updation and enhancement of skills. Such courses would
acquaint them with the latest trends and developments occurring in their respective field and
update them on clinical and professional issues arising out of new legislation, technological
changes and government policies / pronouncements.
5.3.5 Recommendation:
a)

Every Professional Regulatory Body in coordination with the respective


National Quality and Standards Council and Academic Institutions should
conduct Continuing Professional Education programmes periodically for
updation and skill enhancement of its members.

There should be stronger ties between educational institutions in the public


and private sectors through mechanisms such as exchange of faculty.

121

Social Capital A Shared Destiny

Such Councils should have full autonomy.

ii.

The highest policy and decision making Body of these Councils


should have a majority of independent members, and preferably no
more than 2 or 3 drawn from government, who could be there in an
ex-officio capacity.

iii.

These Councils should have a strong and effective grievance redressal


mechanism.

iv.

The Councils should be accountable to Parliament and their


Report should be placed before the House annually. In addition,
there should be strong norms for suo-motu disclosures under
the RTI Act.

v.

Each of these Councils should have a body of experts to advise it


on accreditation / certification of institutions falling under their
jurisdiction.

vi.

Some of the members of such Councils can be elected from office


bearers of specialty Associations (e.g. Indian Medical Association),
as these members are elected by the practicing professionals in their
individual speciality.

d)

Within such norms, standards and parameters, the Universities/


Autonomous Institutions should be given full autonomy for setting up
and running institutions under their jurisdiction.

e)

The recommendations of the National Knowledge Commission regarding


reforms in the structure, governance and functioning of Universities should
be examined and implemented on priority. The process of appointment
of Vice Chancellors should be free from direct or indirect interference of
the government. Vice Chancellors should be given a fixed tenure and they
should have adequate authority and flexibility to govern the Universities
with the advice and consent of the Executive Council.

f )

120

i.

Self-Regulatory Authorities

5.3 Professional Updation


5.3.1 In the present era when technology and skills are changing rapidly, there is need for
professionals to update their knowledge and technical skills.
5.3.2 In order to provide specialised knowledge, ICAI offers short term post-qualification
courses in management accountancy, corporate affairs and tax management. It has
also introduced courses in information system audit, insurance and risk management,
international trade laws and WTO. It conducts periodic programmes on computer aided
auditing techniques.
5.3.3 ICAI through its Continuing Professional Education Directorate assumes the
responsibility of updating its members on professional issues arising out of new legislations,
technological changes and latest policies and pronouncements of the government
and other agencies / organisations. Continuing Professional Education (CPE) has been
made mandatory for ICAI members since 2003. Now, members will have to earn CPE
credit by undergoing such trainings. The MCI too is now facilititating CPE programmes
being hosted by some of the reputed medical institutions. It is providing financial
assistance to them.
5.3.4 But, many professions do not offer such quality enhancement programmes to their
members. For example, the only option available to a practicing lawyer is to join a twoyear Masters course in a University. The Commission is of the view that the Professional
Regulatory Bodies in conjunction with the respective National Quality and Standards
Council and the academic institutions should offer short duration courses of 4 to 6 weeks
to practicing professionals for updation and enhancement of skills. Such courses would
acquaint them with the latest trends and developments occurring in their respective field and
update them on clinical and professional issues arising out of new legislation, technological
changes and government policies / pronouncements.
5.3.5 Recommendation:
a)

Every Professional Regulatory Body in coordination with the respective


National Quality and Standards Council and Academic Institutions should
conduct Continuing Professional Education programmes periodically for
updation and skill enhancement of its members.

There should be stronger ties between educational institutions in the public


and private sectors through mechanisms such as exchange of faculty.

121

Social Capital A Shared Destiny

5.4 Ethical Education and Training


5.4.1 Decline of ethics among professionals can be attributed to two primary factors: (i) the
tenor of the overall educational system; and (ii) impact of the environment. While behavioral
changes can be brought about through carefully designed training programmes, trying to change
entrenched mindsets is more difficult. It needs sustained efforts from all concerned. Ethics finds
a very small space in our current academic content. There is need to give it a prominent place
in the curricula being followed by professional institutions throughout the country.
5.4.2 Once the education part of a profession is hived off to a different machinery, the
currently existing regulatory structure would be free to devote time and energy to issues
of entry and maintenance of professional ethics and standards. In this context, holding
workshops, seminars and interactive sessions periodically would be of great value.
5.4.3 Recommendation:
a)

After separation of professional education, the agenda of the Professional


Regulatory Authorities should be to focus on (i) procedure for registration
of new members / renewal of registration; and (ii) matters concerning
professional ethics, standards and behavior. The Regulatory Authorities
should also pay greater attention to conducting workshops, seminars and
training programmes on such issues.

5.5 Enrolment in the Profession


5.5.1 As per the current practice, once a person successfully obtains a professional degree,
getting registered as a member of the profession is almost a matter of routine. The candidate
is asked to fill up certain forms, deposit a prescribed fee and thereafter he is enrolled as a
practitioner. Such a perfunctory procedure is not in the interest of the profession. There is
need to put in place a stricter procedure for enrolment / registration of new members.
5.5.2 The Law Commission, in its 184th Report submitted to the Government in 2002,
had recommended that an apprenticeship of six months followed by a test should be made
mandatory for registration at the Bar. In this connection, it had quoted the report of the
Ahmedi Commission on Legal Education submitted in 1999. The National Knowledge
Commission recommended that entry into a profession should be based on an examination
conducted by the respective Professional Regulatory Body at the national level.
5.5.3 Currently, two kinds of law syllabi are being followed in the country; one is the
three year degree course for graduates, and the second is the five-year integrated course
122

Self-Regulatory Authorities

for senior school passouts. Both these courses


provide some kind of practical training to
students through organisation of moot courts,
interactive sessions with Judges and lawyers and
short attachment with institutions / industries.
For a medical course, internship is an integral
component of the syllabus. For Chartered
Accountants and Company Secretaries too,
there is considerable emphasis on practical
learning. Hence, the Commission is of the
view that any further requirement of practical
training / internship or a separate set of entrance
examinations may not be needed for enrolment
of new members. However, in order to ensure a
healthy growth of the profession, the respective
Professional Regulatory Authority should be
empowered to prescribe basic guidelines for
enrolment of new members.
5.5.4 Recommendation:
a)

Within the parameters of the


Act, the respective Regulatory
Authority should be empowered
to prescribe guidelines for
enrolment of new members.

5.6 Renewal/Revalidation of Registration


5.6.1 As per the prevailing practice in our
country, in all professions, once a person is
registered as an entrant, he acquires a lifetime
membership. No process of renewal or reregistration is needed thereafter. The only
ground on which a professional could lose his
membership would be a case of extreme deviant
behaviour.
5.6.2 The Commission is of the view that
when technology, standards of skills and the

Box. 5.1: Professional Revalidation in


USA and UK
Certification in USA
In the United States, many hospitals forbid doctors to
practice without proof of a valid board certification
in their specialty. National Board of Trial Advocacy
(NBTA) is a non-profit organization of Attorneys
set up with the aim of bettering the quality of trial
advocacy and establishing objective standards by
which to measure experience and expertise of trial
lawyers. NBTA has been accredited by the American
Bar Association to certify lawyers in the speciality
areas of civil, criminal and family laws. Certificate
holders undergo a thorough screening of their
credentials, documentation of experience, a formal
examination and a comprehensive checking of
disciplinary matters raised against them. Possessing
the NBTA certificate means that the Attorney holds
a higher level of professional and personal conduct.
Source: www.nbtanet.org
Revalidation in Medical Profession in the UK
The revalidation process involves two processes:
(i) Doctor shows practice in line with good medical
practice (GMP) and (ii) the GMC confirms that the
licence will continue.
Appraisal and Clinic Governance and Independent or
Outside Clinic Governance are two routes to obtain
revalidation. For revalidation through Appraisal/
Clinic Governance, the doctors should have:
Worked under clinical governance during the
revalidation period
Participated in annual appraisal
Kept the supporting documentation
Whereas for revalidation through outside Clinical
Governance route, the doctors must show: They have followed GMP during the revalidation
period
Evidence of participation in quality assured
appraisal
Analysed outcomes from questionnaire tools
Good Medical Practice involves the following:
Good clinical care
Maintaining good medical practice
Teaching and training
Relationships with patients
Working with colleagues
Probity
Health
Subject to the satisfactory evidence, revalidation is
granted to the registered medical professionals by the
General Medical Council, every five years.
Source : www.gmc-uk.org

123

Social Capital A Shared Destiny

5.4 Ethical Education and Training


5.4.1 Decline of ethics among professionals can be attributed to two primary factors: (i) the
tenor of the overall educational system; and (ii) impact of the environment. While behavioral
changes can be brought about through carefully designed training programmes, trying to change
entrenched mindsets is more difficult. It needs sustained efforts from all concerned. Ethics finds
a very small space in our current academic content. There is need to give it a prominent place
in the curricula being followed by professional institutions throughout the country.
5.4.2 Once the education part of a profession is hived off to a different machinery, the
currently existing regulatory structure would be free to devote time and energy to issues
of entry and maintenance of professional ethics and standards. In this context, holding
workshops, seminars and interactive sessions periodically would be of great value.
5.4.3 Recommendation:
a)

After separation of professional education, the agenda of the Professional


Regulatory Authorities should be to focus on (i) procedure for registration
of new members / renewal of registration; and (ii) matters concerning
professional ethics, standards and behavior. The Regulatory Authorities
should also pay greater attention to conducting workshops, seminars and
training programmes on such issues.

5.5 Enrolment in the Profession


5.5.1 As per the current practice, once a person successfully obtains a professional degree,
getting registered as a member of the profession is almost a matter of routine. The candidate
is asked to fill up certain forms, deposit a prescribed fee and thereafter he is enrolled as a
practitioner. Such a perfunctory procedure is not in the interest of the profession. There is
need to put in place a stricter procedure for enrolment / registration of new members.
5.5.2 The Law Commission, in its 184th Report submitted to the Government in 2002,
had recommended that an apprenticeship of six months followed by a test should be made
mandatory for registration at the Bar. In this connection, it had quoted the report of the
Ahmedi Commission on Legal Education submitted in 1999. The National Knowledge
Commission recommended that entry into a profession should be based on an examination
conducted by the respective Professional Regulatory Body at the national level.
5.5.3 Currently, two kinds of law syllabi are being followed in the country; one is the
three year degree course for graduates, and the second is the five-year integrated course
122

Self-Regulatory Authorities

for senior school passouts. Both these courses


provide some kind of practical training to
students through organisation of moot courts,
interactive sessions with Judges and lawyers and
short attachment with institutions / industries.
For a medical course, internship is an integral
component of the syllabus. For Chartered
Accountants and Company Secretaries too,
there is considerable emphasis on practical
learning. Hence, the Commission is of the
view that any further requirement of practical
training / internship or a separate set of entrance
examinations may not be needed for enrolment
of new members. However, in order to ensure a
healthy growth of the profession, the respective
Professional Regulatory Authority should be
empowered to prescribe basic guidelines for
enrolment of new members.
5.5.4 Recommendation:
a)

Within the parameters of the


Act, the respective Regulatory
Authority should be empowered
to prescribe guidelines for
enrolment of new members.

5.6 Renewal/Revalidation of Registration


5.6.1 As per the prevailing practice in our
country, in all professions, once a person is
registered as an entrant, he acquires a lifetime
membership. No process of renewal or reregistration is needed thereafter. The only
ground on which a professional could lose his
membership would be a case of extreme deviant
behaviour.
5.6.2 The Commission is of the view that
when technology, standards of skills and the

Box. 5.1: Professional Revalidation in


USA and UK
Certification in USA
In the United States, many hospitals forbid doctors to
practice without proof of a valid board certification
in their specialty. National Board of Trial Advocacy
(NBTA) is a non-profit organization of Attorneys
set up with the aim of bettering the quality of trial
advocacy and establishing objective standards by
which to measure experience and expertise of trial
lawyers. NBTA has been accredited by the American
Bar Association to certify lawyers in the speciality
areas of civil, criminal and family laws. Certificate
holders undergo a thorough screening of their
credentials, documentation of experience, a formal
examination and a comprehensive checking of
disciplinary matters raised against them. Possessing
the NBTA certificate means that the Attorney holds
a higher level of professional and personal conduct.
Source: www.nbtanet.org
Revalidation in Medical Profession in the UK
The revalidation process involves two processes:
(i) Doctor shows practice in line with good medical
practice (GMP) and (ii) the GMC confirms that the
licence will continue.
Appraisal and Clinic Governance and Independent or
Outside Clinic Governance are two routes to obtain
revalidation. For revalidation through Appraisal/
Clinic Governance, the doctors should have:
Worked under clinical governance during the
revalidation period
Participated in annual appraisal
Kept the supporting documentation
Whereas for revalidation through outside Clinical
Governance route, the doctors must show: They have followed GMP during the revalidation
period
Evidence of participation in quality assured
appraisal
Analysed outcomes from questionnaire tools
Good Medical Practice involves the following:
Good clinical care
Maintaining good medical practice
Teaching and training
Relationships with patients
Working with colleagues
Probity
Health
Subject to the satisfactory evidence, revalidation is
granted to the registered medical professionals by the
General Medical Council, every five years.
Source : www.gmc-uk.org

123

124

Source: Annual Report, 2006-07 Bar Council of India

12

16
28


22
1

Delhi

Chennai

21. 9/10.12.2006

22. 23/24.12.2006

59

10
5
5

1
9
30
4
Bhopal
20. 2/3.12.2006

64



1

2
3
14
Delhi
19. 24/25.11.2006

12

1
3

20
56

19
1
Delhi

Hyderabad

17. 4/5/11.2006

18. 11/12.11.2006

8
2
4
2
2
13
31
4
Ernakulam
16. 14/15.10.2006

55





2
2
22
Delhi
15. 7/8/10. 2006

1
3

3
10

1
20

24
3

Banglaore

Delhi

13. 26/27.8.2006

14. 23/24.9.2006

1



5
6
18
Kolkata
12. 18.8.06

1

1


2
4
20
Delhi
11. 12/13.8.2006

1




1
2
12
Delhi
10. 24/25.6.2006

2
1

1
1

2
2

18
34

6
24

52
3
Hyderabad

Delhi

8. 8/9.7.06

9. 15/16/7.2006


1

2
3
6
2
Delhi
7. 19/20.6.2006

23

2
2

1
2
6
13
36
Jaipur
6. 3/4.6.06

2
2

2
1

8
12

13
35

46
3

Mumbai

Chandigarh

4. 20/21.5.2006

5. 27/28.5.2006

1


1

3
5
19
Delhi
3. 13/14.5.2006

6



5
11
38
Ernakulam

Judgement
reserved
Repri-
manded


1

12

2. 6/7.5.06

5.7.3 ICAI has an innovative mechanism to punish errant members and prevent unethical
practices. It has a pro-active disciplinary cell which speedily investigates complaints against
its members. ICAI entertains complaints not only from stakeholders or user-groups but also
takes suo-motu action on the basis of its in-house information. The provisions contained in
the code of conduct of ICAI are very stringent and the agency is equally effective in taking
action against its defaulting members. Peer review is undertaken to ensure compliance with
technical standards and adherence to quality control policies and procedures. Often, ICAI on
its own, looks into public accounts of different organisations including Banks and financial
institutions. Disciplinary actions is taken if there is any deficiency in reporting. Quality control
among Chartered Accountants is ensured by peer pressure and financial reporting review.

14

5.7.2 Though, the Regulatory Acts prescribe a mechanism for disciplining professional
practitioners, in actual practice, the enforcement of ethical conduct among them remains
weak. It is primarily because of two reasons: (a) there is reluctance on the part of the public
to report cases of deviant behaviour because of (i) ignorance, (ii) respect for the profession
or (iii) for fear of reprisal; and (b) many of these Bodies have not been able to develop a
proactive attitude which could suo motu take cognizance of unprofessional / unethical
behaviour of practitioners. The statutes need to be strengthened on these aspects.

28

5.7.1 A Professional Regulatory Authority sets and enforces standards in a profession so


that its practitioners can earn the trust of their clients. The autonomy given to a Regulatory
Authority in matters of discipline obliges it to preserve professional purity. For instance, in
the legal profession, it is societys expectation from the legal fraternity that it shall objectively
and diligently provide inexpensive legal aid and advice to all who are obliged to take recourse
to legal remedies. It must remain vigilant and keep strict disciplinary control over breaches
of ethics by its members. This is so with the other professions as well.

5.7 Disciplinary Mechanism

Delhi

There should be a provision in the relevant laws that a professional


registration/license will need revalidation after a prescribed number of
years. It could be done after successful completion of a course prescribed
by the respective Professional Regulatory Authority.

1. 29/30.5.2006

a)

Appeal
Allowed

5.6.3 Recommendation:

Sl. Date of
Place of
No. of
No. of
Disposed
Dismissed Nature of Orders
No. Meeting
Meeting Committees
Cases
of
Repri-
Suspen-

manded
ded

functional environment are changing rapidly, obtaining just a degree at some point of
time is not enough to sustain professional competence for a lifetime. There needs to be a
statutory provision that a registration / license will require revalidation / recertification at
specified intervals.

Self-Regulatory Authorities

Table 5.1: Disciplinary Committee Meetings held, Cases Disposed of, and the Nature of Orders from 1st April, 2006 to 31st March, 2007 (Bar Council of India)

Social Capital A Shared Destiny

125

124

Source: Annual Report, 2006-07 Bar Council of India

12

16
28


22
1

Delhi

Chennai

21. 9/10.12.2006

22. 23/24.12.2006

59

10
5
5

1
9
30
4
Bhopal
20. 2/3.12.2006

64



1

2
3
14
Delhi
19. 24/25.11.2006

12

1
3

20
56

19
1
Delhi

Hyderabad

17. 4/5/11.2006

18. 11/12.11.2006

8
2
4
2
2
13
31
4
Ernakulam
16. 14/15.10.2006

55





2
2
22
Delhi
15. 7/8/10. 2006

1
3

3
10

1
20

24
3

Banglaore

Delhi

13. 26/27.8.2006

14. 23/24.9.2006

1



5
6
18
Kolkata
12. 18.8.06

1

1


2
4
20
Delhi
11. 12/13.8.2006

1




1
2
12
Delhi
10. 24/25.6.2006

2
1

1
1

2
2

18
34

6
24

52
3
Hyderabad

Delhi

8. 8/9.7.06

9. 15/16/7.2006


1

2
3
6
2
Delhi
7. 19/20.6.2006

23

2
2

1
2
6
13
36
Jaipur
6. 3/4.6.06

2
2

2
1

8
12

13
35

46
3

Mumbai

Chandigarh

4. 20/21.5.2006

5. 27/28.5.2006

1


1

3
5
19
Delhi
3. 13/14.5.2006

6



5
11
38
Ernakulam

Judgement
reserved
Repri-
manded


1

12

2. 6/7.5.06

5.7.3 ICAI has an innovative mechanism to punish errant members and prevent unethical
practices. It has a pro-active disciplinary cell which speedily investigates complaints against
its members. ICAI entertains complaints not only from stakeholders or user-groups but also
takes suo-motu action on the basis of its in-house information. The provisions contained in
the code of conduct of ICAI are very stringent and the agency is equally effective in taking
action against its defaulting members. Peer review is undertaken to ensure compliance with
technical standards and adherence to quality control policies and procedures. Often, ICAI on
its own, looks into public accounts of different organisations including Banks and financial
institutions. Disciplinary actions is taken if there is any deficiency in reporting. Quality control
among Chartered Accountants is ensured by peer pressure and financial reporting review.

14

5.7.2 Though, the Regulatory Acts prescribe a mechanism for disciplining professional
practitioners, in actual practice, the enforcement of ethical conduct among them remains
weak. It is primarily because of two reasons: (a) there is reluctance on the part of the public
to report cases of deviant behaviour because of (i) ignorance, (ii) respect for the profession
or (iii) for fear of reprisal; and (b) many of these Bodies have not been able to develop a
proactive attitude which could suo motu take cognizance of unprofessional / unethical
behaviour of practitioners. The statutes need to be strengthened on these aspects.

28

5.7.1 A Professional Regulatory Authority sets and enforces standards in a profession so


that its practitioners can earn the trust of their clients. The autonomy given to a Regulatory
Authority in matters of discipline obliges it to preserve professional purity. For instance, in
the legal profession, it is societys expectation from the legal fraternity that it shall objectively
and diligently provide inexpensive legal aid and advice to all who are obliged to take recourse
to legal remedies. It must remain vigilant and keep strict disciplinary control over breaches
of ethics by its members. This is so with the other professions as well.

5.7 Disciplinary Mechanism

Delhi

There should be a provision in the relevant laws that a professional


registration/license will need revalidation after a prescribed number of
years. It could be done after successful completion of a course prescribed
by the respective Professional Regulatory Authority.

1. 29/30.5.2006

a)

Appeal
Allowed

5.6.3 Recommendation:

Sl. Date of
Place of
No. of
No. of
Disposed
Dismissed Nature of Orders
No. Meeting
Meeting Committees
Cases
of
Repri-
Suspen-

manded
ded

functional environment are changing rapidly, obtaining just a degree at some point of
time is not enough to sustain professional competence for a lifetime. There needs to be a
statutory provision that a registration / license will require revalidation / recertification at
specified intervals.

Self-Regulatory Authorities

Table 5.1: Disciplinary Committee Meetings held, Cases Disposed of, and the Nature of Orders from 1st April, 2006 to 31st March, 2007 (Bar Council of India)

Social Capital A Shared Destiny

125

Social Capital A Shared Destiny

5.7.4 For advocates, the State Bar Council gets a period of one year to decide on a disciplinary
proceeding, but there is no time limit for disposal of the case when it comes in appeal to
the Apex Body (the Bar Council of India). For medical professionals, the respective State
Medical Council has been given a period of six months to decide on a disciplinary matter
but again there is no time limit for deciding an appeal filed before the Apex Body (the
MCI). Further it will be evident from the Table 5.1 that only a small percentage of the
complaints result into penalty.
5.7.5 The Commission feels that the existing in-house mechanisms of the Professional
Bodies have not acted in the best interest of the people or the profession. The Commission
is of the view that the participation of the stakeholders is needed to bring objectivity in the
system. Hence, every Disciplinary Panel should have a membership consisting of senior
professionals as well as outsiders (lay persons) in the ratio 60:40. Whenever a complaint
is received, it should be disposed of within a given time limit (say 90 days). An appeal
against a decision of the State Panel would lie before the Apex Body which again would be
required to dispose of the matter within the same time limit.
5.7.6 Recommendations:
a)

There should be provision in the relevant laws that in order to bring


objectivity in their working, the Disciplinary Committees of the Regulatory
Authorities at both the State as well as the national level should consist of
professional and non-professional members. They could be inducted in
the Committee in the ratio of 60:40 respectively.

b)

The law should provide that such Bodies should be required to complete
the entire disciplinary proceeding within a prescribed time span
(say 90 days).

c)

The law should also have a provision that anybody aggrieved with the
findings of the State Panel could go in appeal to the National (Apex) Body
which too will have to dispose of the matter within the prescribed time
limit (say 90 days).

Self-Regulatory Authorities

5.8 Composition of the Self-Regulatory Authorities


5.8.1 Interface between the Government and the Regulatory Bodies
5.8.1.1 Regulatory Authorities have been given considerable autonomy by law. The intent
of the law is to reassure the public that these Bodies will function without any constraint
and provide quality service to them. But in actual practice, there are variations in the extent
of autonomy which such Bodies enjoy. For example, the BCI enjoys more autonomy as
compared to the AICTE in terms of setting the agenda for education, training and practice.
There are only two government representatives (both ex-officio members) out of a total
strength of 21 in the BCI General Council (Attorney General and Solicitor General), while
in the AICTE, 19 out of 21 are government representatives.
5.8.2 Governing Structure
5.8.2.1 In general, the Regulatory Authorities have been modelled on the Parliamentary
form of government with an elected General Body and a smaller Executive outfit having
nominated members. Structures like the General Council, the Executive Committee (EC),
the Educational, Examination, Ethical and Finance Committees are common to all the six
SRAs. However, there is considerable variation in their size, composition and number. The
ICAI has the largest number of Standing Committees (37). It is followed by ICSI (20),
ICWAI (18), MCI (16), and BCI (10). As per the size of the General Body, the MCI tops
the list with 119 members followed by COA 41, ICAI 40, BCI 21, ICWAI and ICSI with
20 members each. Also, there is variation in the strength of the Executive Committees.
MCI has 10 members, followed by BCI 9, ICWAI 7, COA 7, ICAI 6 and ICSI 5.
Table 5.2: Structure and Composition of the Regulatory Authorities
Name of the
Size of the
Organisation
General Body

Size of the
Executive
Committee

No. of Subject
Standing
Committees

BCI 21 9

10

MCI

10

16

ICAI 40 6

37

ICWAI

20 7

18

ICSI 20 5

20

119

COA 41 7 5
Source : Compiled from the websites of these agencies.
126

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Social Capital A Shared Destiny

5.7.4 For advocates, the State Bar Council gets a period of one year to decide on a disciplinary
proceeding, but there is no time limit for disposal of the case when it comes in appeal to
the Apex Body (the Bar Council of India). For medical professionals, the respective State
Medical Council has been given a period of six months to decide on a disciplinary matter
but again there is no time limit for deciding an appeal filed before the Apex Body (the
MCI). Further it will be evident from the Table 5.1 that only a small percentage of the
complaints result into penalty.
5.7.5 The Commission feels that the existing in-house mechanisms of the Professional
Bodies have not acted in the best interest of the people or the profession. The Commission
is of the view that the participation of the stakeholders is needed to bring objectivity in the
system. Hence, every Disciplinary Panel should have a membership consisting of senior
professionals as well as outsiders (lay persons) in the ratio 60:40. Whenever a complaint
is received, it should be disposed of within a given time limit (say 90 days). An appeal
against a decision of the State Panel would lie before the Apex Body which again would be
required to dispose of the matter within the same time limit.
5.7.6 Recommendations:
a)

There should be provision in the relevant laws that in order to bring


objectivity in their working, the Disciplinary Committees of the Regulatory
Authorities at both the State as well as the national level should consist of
professional and non-professional members. They could be inducted in
the Committee in the ratio of 60:40 respectively.

b)

The law should provide that such Bodies should be required to complete
the entire disciplinary proceeding within a prescribed time span
(say 90 days).

c)

The law should also have a provision that anybody aggrieved with the
findings of the State Panel could go in appeal to the National (Apex) Body
which too will have to dispose of the matter within the prescribed time
limit (say 90 days).

Self-Regulatory Authorities

5.8 Composition of the Self-Regulatory Authorities


5.8.1 Interface between the Government and the Regulatory Bodies
5.8.1.1 Regulatory Authorities have been given considerable autonomy by law. The intent
of the law is to reassure the public that these Bodies will function without any constraint
and provide quality service to them. But in actual practice, there are variations in the extent
of autonomy which such Bodies enjoy. For example, the BCI enjoys more autonomy as
compared to the AICTE in terms of setting the agenda for education, training and practice.
There are only two government representatives (both ex-officio members) out of a total
strength of 21 in the BCI General Council (Attorney General and Solicitor General), while
in the AICTE, 19 out of 21 are government representatives.
5.8.2 Governing Structure
5.8.2.1 In general, the Regulatory Authorities have been modelled on the Parliamentary
form of government with an elected General Body and a smaller Executive outfit having
nominated members. Structures like the General Council, the Executive Committee (EC),
the Educational, Examination, Ethical and Finance Committees are common to all the six
SRAs. However, there is considerable variation in their size, composition and number. The
ICAI has the largest number of Standing Committees (37). It is followed by ICSI (20),
ICWAI (18), MCI (16), and BCI (10). As per the size of the General Body, the MCI tops
the list with 119 members followed by COA 41, ICAI 40, BCI 21, ICWAI and ICSI with
20 members each. Also, there is variation in the strength of the Executive Committees.
MCI has 10 members, followed by BCI 9, ICWAI 7, COA 7, ICAI 6 and ICSI 5.
Table 5.2: Structure and Composition of the Regulatory Authorities
Name of the
Size of the
Organisation
General Body

Size of the
Executive
Committee

No. of Subject
Standing
Committees

BCI 21 9

10

MCI

10

16

ICAI 40 6

37

ICWAI

20 7

18

ICSI 20 5

20

119

COA 41 7 5
Source : Compiled from the websites of these agencies.
126

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Social Capital A Shared Destiny

5.8.3 Membership of the Governing Bodies


5.8.3.1 Generally, there are four routes through which a professional can become a member
of the Governing Council of a Professional Body (at both the State as well as the apex level)
i.e. by election, by nomination, by co-option or by ex-officio membership. Some seats are
reserved for teaching faculties of Universities / Colleges. The challenge is to find a model
that will promote inclusiveness and transparency, and which will enjoy the confidence of
the profession as of well as of the citizens.
5.8.4 Tenure of Office and Collective Leadership
5.8.4.1 Free and fair periodic elections together with a short tenure for office bearers can
promote collective and honest leadership. The control of an institution by a few individuals
for a long period is not a healthy practice and invariably leads to growth of vested interests.
For instance, one individual remained as President of the Council of Architects of India
for 21 years (1973-1997) with just a two-year break. The tenure of the President in the
MCI is five years and there is no bar on seeking re-election. An incumbent thus remained
in office for ten long years till he was advised to step down by the Delhi High Court on
corruption charges. Such long tenures also deny entry to younger professionals who could
bring new ideas to such Bodies. The tenure of the President in the ICAI and the ICWAI
is just one year.
5.8.4.2 It is felt that the existing governing structures of the Professional Regulatory
Bodies do not have an inclusive character. There is no client representation (unlike in
the UK and the USA). Secondly, the ratio of elected and nominated members too is
highly skewed. In the BCI, 19 out of 21 members are elected and the remaining two are
there in ex-officio capacity. On the other hand, in the AICTE, 19 out of a membership
of 21 are government nominees or ex-officio members. While in the ICAI, only 6 out
of 40 members are ex-officio/ government nominees. Thirdly, there is no provision
for sectoral representation (i.e. from various sub-specialisations; dentistry, pharmacy,
neurology and bio-sciences in the MCI or corporate, human rights or businesses law
in the BCI) in important functional committees. Often, the Committees appear to
be biased towards a particular region, class, group / community. An organisation like
the BCI with just 21 members is too small to be genuinely inclusive.

128

Self-Regulatory Authorities

5.8.5 Any attempt to reform these Authorities would require adherence to the following
four core principles:
Effectiveness the need for the Regulatory Body to discharge its statutory functions as
effectively as possible. These Bodies could operate effectively and speedily with inputs
from key stakeholders and with much clearer lines of accountability, if the organisational
structures are of appropriate size, simple and task oriented.
Inclusiveness the need to have the confidence and participation of key stakeholders.
Accountability the need to be accountable to stakeholders.
Transparency the need to be open about the decisions and actions they take.
5.8.6 The following factors should be taken into consideration with regard to constitution
of these Regulatory Bodies. First, there should be an overall majority of elected professionals
(in keeping with the principle of professionally-led regulators). Secondly, there should be a
significant proportion of lay members in them (say in the ratio of 60:40), in keeping with
the principle that professionally-led regulators are required to work in partnership with the
general public. Thirdly, nominated/ government appointed members should also be on the
Board. The Bodys accountability to the public and to the profession should be renewed
and strengthened. Lastly, there should be an explicit accountability to Parliament.
5.8.7 The Commission is of the view that the Regulatory Bodies should consist of a large
General Council and a small Executive Committee (EC), each with well defined statutory
powers and responsibilities. For instance, the General Council with 50-60 members would
strike a right balance between the requirements of effectiveness and those of inclusiveness
and accountability. Such a Body could meet frequently to discharge business. Its size would
offer a wide perspective on matters under debate. On the other hand, a smaller General
Council of 20-25 members could run the risk of being non-representative. The creation of a
larger Body enables the model to be inclusive as well as effective. It would permit stakeholder
participation in policy formulation, and provide opportunity for people to involve in
other activities of the Body. The statutory functions of the General Council would include
electing members of the Excutive Committee, electing / nominating to other statutory or
non- statutory policy Committees, requiring the Excutive Committee and other Committees
to submit Reports and scrutinising / analysing those documents.

129

Social Capital A Shared Destiny

5.8.3 Membership of the Governing Bodies


5.8.3.1 Generally, there are four routes through which a professional can become a member
of the Governing Council of a Professional Body (at both the State as well as the apex level)
i.e. by election, by nomination, by co-option or by ex-officio membership. Some seats are
reserved for teaching faculties of Universities / Colleges. The challenge is to find a model
that will promote inclusiveness and transparency, and which will enjoy the confidence of
the profession as of well as of the citizens.
5.8.4 Tenure of Office and Collective Leadership
5.8.4.1 Free and fair periodic elections together with a short tenure for office bearers can
promote collective and honest leadership. The control of an institution by a few individuals
for a long period is not a healthy practice and invariably leads to growth of vested interests.
For instance, one individual remained as President of the Council of Architects of India
for 21 years (1973-1997) with just a two-year break. The tenure of the President in the
MCI is five years and there is no bar on seeking re-election. An incumbent thus remained
in office for ten long years till he was advised to step down by the Delhi High Court on
corruption charges. Such long tenures also deny entry to younger professionals who could
bring new ideas to such Bodies. The tenure of the President in the ICAI and the ICWAI
is just one year.
5.8.4.2 It is felt that the existing governing structures of the Professional Regulatory
Bodies do not have an inclusive character. There is no client representation (unlike in
the UK and the USA). Secondly, the ratio of elected and nominated members too is
highly skewed. In the BCI, 19 out of 21 members are elected and the remaining two are
there in ex-officio capacity. On the other hand, in the AICTE, 19 out of a membership
of 21 are government nominees or ex-officio members. While in the ICAI, only 6 out
of 40 members are ex-officio/ government nominees. Thirdly, there is no provision
for sectoral representation (i.e. from various sub-specialisations; dentistry, pharmacy,
neurology and bio-sciences in the MCI or corporate, human rights or businesses law
in the BCI) in important functional committees. Often, the Committees appear to
be biased towards a particular region, class, group / community. An organisation like
the BCI with just 21 members is too small to be genuinely inclusive.

128

Self-Regulatory Authorities

5.8.5 Any attempt to reform these Authorities would require adherence to the following
four core principles:
Effectiveness the need for the Regulatory Body to discharge its statutory functions as
effectively as possible. These Bodies could operate effectively and speedily with inputs
from key stakeholders and with much clearer lines of accountability, if the organisational
structures are of appropriate size, simple and task oriented.
Inclusiveness the need to have the confidence and participation of key stakeholders.
Accountability the need to be accountable to stakeholders.
Transparency the need to be open about the decisions and actions they take.
5.8.6 The following factors should be taken into consideration with regard to constitution
of these Regulatory Bodies. First, there should be an overall majority of elected professionals
(in keeping with the principle of professionally-led regulators). Secondly, there should be a
significant proportion of lay members in them (say in the ratio of 60:40), in keeping with
the principle that professionally-led regulators are required to work in partnership with the
general public. Thirdly, nominated/ government appointed members should also be on the
Board. The Bodys accountability to the public and to the profession should be renewed
and strengthened. Lastly, there should be an explicit accountability to Parliament.
5.8.7 The Commission is of the view that the Regulatory Bodies should consist of a large
General Council and a small Executive Committee (EC), each with well defined statutory
powers and responsibilities. For instance, the General Council with 50-60 members would
strike a right balance between the requirements of effectiveness and those of inclusiveness
and accountability. Such a Body could meet frequently to discharge business. Its size would
offer a wide perspective on matters under debate. On the other hand, a smaller General
Council of 20-25 members could run the risk of being non-representative. The creation of a
larger Body enables the model to be inclusive as well as effective. It would permit stakeholder
participation in policy formulation, and provide opportunity for people to involve in
other activities of the Body. The statutory functions of the General Council would include
electing members of the Excutive Committee, electing / nominating to other statutory or
non- statutory policy Committees, requiring the Excutive Committee and other Committees
to submit Reports and scrutinising / analysing those documents.

129

Social Capital A Shared Destiny

5.8.8 A small Executive Committee consisting of 10-15 members would be suitable for
preparing policy papers, for implementing and monitoring policies, and taking urgent
executive action. This Body would be required to work within the boundaries of transparent
standing orders issued by the General Council. The overall responsibility for discharging
the main statutory functions such as registration, setting standards of practice, and acting
on complaints against professionals should lie with the Executive Committee.
5.8.9 As regards the tenure of the Members and the office bearers, the Commission feels
that no office bearer should be allowed to continue beyond one term. However, in case of
members of the Council, there should be a limit of a maximum of two terms.
5.8.10 Recommendations:
a)

The structure and composition of the General Council and the Executive
Committee of Professional Regulatory Authorities should be rationalised.
As far as practicable, it should be uniform for all of them.

b)

Every Authority should have a fairly large and representative General


Council (the ideal number could be around 50; such a Body encourages
a wider perspective and diversity of opinions).

c)

The Executive Committee should be a small Body consisting of 10 to


15 members (a compact forum supports administrative efficiency and
accountability).

d)

There should be an explicit provision that a person cannot be elected to


the post of President / Vice-President or General Secretary for more than
one term. However, a person could be elected as a member of a Body for
a maximum of two terms.

5.8.11 Committees and Working Groups


5.8.11.1 Though, the Executive Council / Committee is generally responsible for the overall
day-to-day functioning of the Regulatory Body, it needs to be supported by specialist
Committees / Working Groups. These specialist Committees and Working Groups
should remain accountable to the Executive Council for the discharge of their functions.
People from outside the Council could also be co-opted to such Bodies wherever found
appropriate.
130

Self-Regulatory Authorities

5.8.12 Clients / Users as Lay Members in Regulatory Authorities


5.8.12.1 Professional regulation cannot function effectively without involvement of key
stakeholders from outside the profession. The involvement of such stakeholders (lay
members) has been a fundamental feature of Professional Bodies in many developed
countries. To ensure that the balance between the profession and the wider community is
maintained, in many such organisations half of the strength comes from lay members. (Lay
members are currently defined as those individuals who are not eligible to be registered
as members of the concerned Regulatory Authority). A large stakeholder representation
gives the authority an opportunity to embrace diversity, whether it is expressed in terms of
gender, region or socio-economic groupings.
5.8.12.2 The method adopted by the General Medical Council (GMC) in UK in the
appointment of lay members provides some guidance in this direction. The Privy Council,
on the recommendation of the UK Health Department, currently appoints lay members
in the GMC.
5.8.12.3 The Commission is of the view that in order to secure involvement of stakeholders and
to encourage diversity of opinions, there should be representation of lay persons in every forum
of a Regulatory Authority. There should be an impartial mechanism to make appointment of
such lay members on pre-determined criteria. This can be ensured if the government makes
the appointments in consultation with the Regulatory Authority concerned.
5.8.12.4 Recommendations:
a)

The composition of the General Council as well as the Executive Committee


should be such that 40% of the strength consists of lay members.

b)

The nomination of lay members should be done by the Ministry /


Department concerned in consultation with the appropriate Regulatory
Authority.

5.9 Accountability and Parliamentary Oversight


5.9.1 Self-Regulatory Authorities enjoy considerable functional autonomy. Though, they
are creatures of the law, their accountability is currently ambiguous and incomplete. The
law does not provide for an explicit mechanism which can hold them responsible for their
performance. The Public, Parliament, Government and the profession have a right to know
how a Self-Regulatory Authority discharges its functions and to hold them accountable.
131

Social Capital A Shared Destiny

5.8.8 A small Executive Committee consisting of 10-15 members would be suitable for
preparing policy papers, for implementing and monitoring policies, and taking urgent
executive action. This Body would be required to work within the boundaries of transparent
standing orders issued by the General Council. The overall responsibility for discharging
the main statutory functions such as registration, setting standards of practice, and acting
on complaints against professionals should lie with the Executive Committee.
5.8.9 As regards the tenure of the Members and the office bearers, the Commission feels
that no office bearer should be allowed to continue beyond one term. However, in case of
members of the Council, there should be a limit of a maximum of two terms.
5.8.10 Recommendations:
a)

The structure and composition of the General Council and the Executive
Committee of Professional Regulatory Authorities should be rationalised.
As far as practicable, it should be uniform for all of them.

b)

Every Authority should have a fairly large and representative General


Council (the ideal number could be around 50; such a Body encourages
a wider perspective and diversity of opinions).

c)

The Executive Committee should be a small Body consisting of 10 to


15 members (a compact forum supports administrative efficiency and
accountability).

d)

There should be an explicit provision that a person cannot be elected to


the post of President / Vice-President or General Secretary for more than
one term. However, a person could be elected as a member of a Body for
a maximum of two terms.

5.8.11 Committees and Working Groups


5.8.11.1 Though, the Executive Council / Committee is generally responsible for the overall
day-to-day functioning of the Regulatory Body, it needs to be supported by specialist
Committees / Working Groups. These specialist Committees and Working Groups
should remain accountable to the Executive Council for the discharge of their functions.
People from outside the Council could also be co-opted to such Bodies wherever found
appropriate.
130

Self-Regulatory Authorities

5.8.12 Clients / Users as Lay Members in Regulatory Authorities


5.8.12.1 Professional regulation cannot function effectively without involvement of key
stakeholders from outside the profession. The involvement of such stakeholders (lay
members) has been a fundamental feature of Professional Bodies in many developed
countries. To ensure that the balance between the profession and the wider community is
maintained, in many such organisations half of the strength comes from lay members. (Lay
members are currently defined as those individuals who are not eligible to be registered
as members of the concerned Regulatory Authority). A large stakeholder representation
gives the authority an opportunity to embrace diversity, whether it is expressed in terms of
gender, region or socio-economic groupings.
5.8.12.2 The method adopted by the General Medical Council (GMC) in UK in the
appointment of lay members provides some guidance in this direction. The Privy Council,
on the recommendation of the UK Health Department, currently appoints lay members
in the GMC.
5.8.12.3 The Commission is of the view that in order to secure involvement of stakeholders and
to encourage diversity of opinions, there should be representation of lay persons in every forum
of a Regulatory Authority. There should be an impartial mechanism to make appointment of
such lay members on pre-determined criteria. This can be ensured if the government makes
the appointments in consultation with the Regulatory Authority concerned.
5.8.12.4 Recommendations:
a)

The composition of the General Council as well as the Executive Committee


should be such that 40% of the strength consists of lay members.

b)

The nomination of lay members should be done by the Ministry /


Department concerned in consultation with the appropriate Regulatory
Authority.

5.9 Accountability and Parliamentary Oversight


5.9.1 Self-Regulatory Authorities enjoy considerable functional autonomy. Though, they
are creatures of the law, their accountability is currently ambiguous and incomplete. The
law does not provide for an explicit mechanism which can hold them responsible for their
performance. The Public, Parliament, Government and the profession have a right to know
how a Self-Regulatory Authority discharges its functions and to hold them accountable.
131

Social Capital A Shared Destiny

5.9.2 It would be pertinent to quote here from the report of the Committee of Inquiry
into the Regulation of the Medical Profession (the Merrison Report) published in UK. The
Report says that the professional regulation is:
A contract between the public and the professionthe legislature that is, Parliament
acts in this context for the public and it is for Parliament to decide the nature of this
contract and the way it is to be executed.
5.9.3 The Commission is of the view that a Self-Regulatory Authoritys primary
accountability as a statutory Body must be to Parliament, which, on behalf of the public,
defines its powers and responsibilities.
5.9.4 Recommendation:
a)

The laws governing the Self-Regulatory Authories should have a provision


under which the Regulatory Authority should be required to present an
Annual Report to the Parliament for scrutiny.

Cooperatives

6.1 Introduction
6.1.1 A cooperative is an autonomous association of persons united voluntarily to meet
their common economic, social and cultural needs and aspirations through a jointly owned
and democratically controlled enterprise. Cooperatives as business enterprise possess some
basic interests such as ownership and control but these interests are directly vested in the
hands of the user. Therefore, they follow certain broad values other than those associated
purely with profit making. Need for profitability is balanced by the needs of the members
and the wider interest of the community. The values universally recognized as cornerstones
of cooperative behaviour are self-help, democracy, equality, equity and solidarity. Voluntary
and open membership, democratic control, economic participation, autonomy, training
and information and concern for community are the overarching features by which the
cooperatives put their values into practice.
6.2 History of Cooperatives in India
6.2.1 The Indian cooperative sector completed 103 years of its existence in 2007. It was
born during the later part of the colonial era predominantly as a Government initiative to
address the twin issues of farmers indebtedness and poverty. This initiative was formalized in
a legislation enacted in 1904 entitled the Cooperative Credit Societies Act, 1904. During
a century of its existence, this sector has built a network consisting of more than 5.45 lakh
individual cooperative organisations and over 236 million members. It is numerically the
largest movement of its kind in the world. With a working capital base of Rs. 34,00,555
millions, presence in practically all walks of rural life and a coverage spanning almost all
villages of the country, the cooperatives have come to be recognized as one of the most
important economic and social organisations in the nations life. Cooperatives are meant
to be enterprises of the citizens and it is envisaged that a vibrant and robust cooperative
movement can significantly contribute in harnessing the positive potential of social capital
for the greater good of society.
6.2.2 The Cooperative Credit Societies Act of 1904 was followed by a number of supporting
legislations including the Cooperative Societies Act, 1912 which provided for the formation

132

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