ARC 9threport Ch5
ARC 9threport Ch5
ARC 9threport Ch5
l)
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
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.
5.2.2 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
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.
5.2.2 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
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
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
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.
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:
119
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.
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:
119
ii.
iii.
iv.
v.
vi.
d)
e)
f )
120
i.
Self-Regulatory Authorities
121
ii.
iii.
iv.
v.
vi.
d)
e)
f )
120
i.
Self-Regulatory Authorities
121
Self-Regulatory Authorities
123
Self-Regulatory Authorities
123
124
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
Delhi
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)
125
124
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
Delhi
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)
125
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)
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
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
127
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)
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
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
127
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.
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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
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)
c)
d)
Self-Regulatory Authorities
b)
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)
c)
d)
Self-Regulatory Authorities
b)
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)
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
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