Policy for pre-legislative consultation and comprehensive review of rules and regulations


The Ministry of Corporate Affairs in India has recently embarked on a significant reform, framing a policy for pre-legislative consultation and comprehensive review of rules and regulations. This landmark decision, effective from January 1, 2024, marks a pivotal shift towards greater transparency, inclusivity, and responsiveness in the legislative process.

Pre-Legislative Consultation for New Rules and Regulations

The Ministry’s approach, underlined in Part A of the policy, focuses on the drafting of principal rules and amendments. It necessitates an explanatory note highlighting the issue addressed, existing regulatory practices, implementation strategies, and the process for public feedback. The Ministry will post these drafts on its website for at least 30 days, allowing for public scrutiny and comment. This duration may be shortened in urgent cases or skipped entirely, based on the discretion of the Ministry’s divisions.

Furthermore, the policy mandates a structured format for public feedback, encouraging detailed, clause-by-clause responses. This inclusive approach is not limited to the general public. It extends to specific stakeholder groups, field offices, and external experts, ensuring a comprehensive consultation process.

The Ministry also plans to involve the public in circulars concerning fee relaxations or compliance, unless they are mere clarifications or informational. Interestingly, the policy advises publishing responses to public comments, ensuring transparency in how public input shapes final rules.

Involving Regulators in the Consultation Process

Similar to the Ministry’s approach, regulators under its ambit are also required to engage in pre-legislative consultations. This involves placing principal regulations and amendments in the public domain for at least 30 days, except in cases of urgency. The policy outlines that draft regulations should be accompanied by an explanatory note covering similar aspects as for rules.

Regulators are encouraged to seek public feedback on even minor regulatory clarifications or temporary measures like fee relaxations. Moreover, they may publish their responses to public comments, mirroring the Ministry’s commitment to transparency.

Comprehensive Review of Existing Rules and Regulations

Part B outlines a policy for a thorough review of existing rules and regulations. This is critical for ensuring that laws remain relevant and effective in a rapidly changing economic environment. The Ministry and regulators are tasked with evaluating each rule and regulation against a set of criteria, including their objectives, implementation experiences, current relevance, and overall regulatory practices.

Public consultation, as detailed in Part A, plays a vital role in this review process. Feedback from stakeholders, experts, and field officers will be integral. Even forms attached to rules and regulations are subject to review, aiming to reduce compliance burdens.

Implementation Timeline and Impact

This comprehensive review exercise is set to begin on January 1, 2024, and is expected to be completed within the financial year 2024-25. The Ministry’s initiative is a commendable step towards democratizing the process of rule-making and regulation. By actively involving the public and other stakeholders, the policy ensures that the legal framework is not only developed with a top-down approach but is shaped by the experiences, needs, and insights of those it impacts the most.

This approach is likely to enhance the quality and effectiveness of regulations. When rules are formulated with broad-based input, they are more likely to be practical, equitable, and well-received by the community. Moreover, this process can significantly contribute to trust-building between the government and its citizens, as it exemplifies a commitment to transparency and accountability.

The inclusion of various stakeholders, including field experts and specific interest groups, ensures that a wide array of perspectives are considered. This diversity in input can lead to more balanced and comprehensive regulations, addressing potential blind spots that may not be evident in a more closed regulatory process.

Additionally, the commitment to revisiting and potentially amending existing rules and regulations ensures that the legal framework stays relevant and effective in the face of evolving social, economic, and technological landscapes. This dynamic approach to policy-making is essential in a rapidly changing world.

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