The Hindu Editorial Analysis- 9th June 2025 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Consultative Regulation-Making that Should Go Further

Why in News?

 The RBI and SEBI have taken initial steps, but it is essential for Parliament to consider enacting a law that establishes clear and standardized procedures for creating regulations. 

Introduction

In May 2023, the Reserve Bank of India (RBI) outlined a clear policy for releasing regulations, guidelines, and notifications. This followed a similar initiative by the Securities and Exchange Board of India (SEBI) in February 2023, where it published rules detailing its regulatory processes.

Strengthening Transparency and Accountability in Regulation-Making

Regulators like the RBI and SEBI, established by Acts of Parliament, possess quasi-legislative powers. Hence, it is crucial to have robust procedural safeguards and checks to uphold the rule of law. Recently, both RBI and SEBI introduced frameworks outlining the steps for law-making, marking a positive shift.

• RBI's New Approach: RBI will now conduct impact analyses when proposing new rules or changes.
• SEBI's Clarity: SEBI will clearly state the regulatory intent and objectives behind its proposals.
• Public Involvement: Both regulators will invite public comments for 21 days on their proposals.
• Periodic Reviews: They will also periodically review their existing regulations.
• Moving Forward: Despite these positive changes, there is room for improvement. Regulators need to explain the economic reasons behind their decisions and establish accountability mechanisms for regular reviews and public feedback responses.

The issue of market failure

RBI and SEBI should base their new rules on a clear economic rationale, identifying the specific problem or market failure the rule aims to address. The Financial Sector Legislative Reforms Commission (FSLRC) in 2013 emphasized that laws should be defined by their economic purpose rather than just procedural goals. Many other countries follow strong regulatory practices that India can learn from.

• Current gaps: RBI discusses "impact analysis" based on "economic environments," and SEBI outlines its objectives. However, neither is required to clearly state the economic reason or market failure behind a proposed regulation.
• In contrast, the IFSCA framework mandates a clear statement of the issue being addressed.

International Best Practices vs Indian Frameworks

What Financial Regulators in India Should Do

• Identify the market failure: Clearly define the core issue or market failure that necessitates regulation.
• Explain the proposed solution: Detail how the regulation aims to address the identified problem.
• Conduct a cost-benefit analysis: Assess the potential benefits and drawbacks of the regulation.
• Develop a monitoring plan: Establish mechanisms to evaluate the regulation's effectiveness post-implementation.

Improving Transparency and Accountability in Consultative Regulation-Making

Current Challenges

• Indian regulators like RBI and SEBI have a poor track record in consultative rule-making.
• A study from June 2014 to July 2015 found that RBI sought public comments on only 2.4% of its circulars, and SEBI invited public input on less than half of its regulations.
• This indicates that stakeholders have had limited opportunities to provide feedback on new regulations.
• Although there is hope for improvement, regulators need to enhance transparency regarding their consultation processes.

Suggested Transparency Measures (Reported Annually)

• To improve accountability, regulators should publish the following:
• Total number of public consultations versus the total number of regulations or amendments.
• Number of responses received.
• Details of suggestions accepted and rejected.
• Reasons for accepting or rejecting each suggestion.
• The impact of public feedback on the final version of the regulation.
• All associated timelines, such as when consultations began and ended.
• SEBI sometimes includes such data in board meeting agendas but often removes public comment summaries citing confidentiality.

Importance of Regular Reviews

• Both RBI and SEBI should specify how often they will review their regulations.
• This is crucial given the government's commitment to deregulation and the need for rules to remain relevant.
• In contrast, the IFSCA mandates a review of each regulation every three years, demonstrating a strong review practice.

Recommended Review Practice for Indian Regulators

Suggestion:

• At pre-defined and frequent intervals, regulators must assess:
• Whether the regulations are working as intended, and whether they are still needed or need updating.

This will enhance the responsiveness, evidence-based nature, and public-friendliness of Indian financial regulation.

Conclusion

Good regulatory practice requires a clear and strong reason for any new rules. The RBI and SEBI have started working in this direction. However, a major challenge is the limited capacity of the government to carry out regulatory impact assessments and hold consultations.

• Also, small changes made by individual regulators may not be enough to keep good regulatory standards everywhere.
• The Parliament could think about passing a law like the Administrative Procedure Act in the United States, which sets standard procedures for making rules.
• This law would include steps like impact analysis, public consultation, and regular review.
• Countries like the United Kingdom and Canada have already created such guidelines for rule-making by government agencies.
• Adopting a similar system in India would make all regulators more transparent and accountable.

Judicial Sensitivity to Sentiments is a Sign of RegressionWhy in News?

 The judiciary in India is hurting free speech by trying to control what people say. 

Introduction

Today, Indian courts are not protecting free speech—they are controlling it. This goes against the true spirit of Article 19(1)(a) of the Constitution, which sees free speech—even if it is provocative or uncomfortable—as a citizen's protection against misuse of power, not something to be feared or restricted.

Judiciary and Free Speech: A Shift in Role

• The judiciary, once seen as a protector against majoritarian power, now often acts like a guardian of politeness, asking for apologies in the name of civility, national pride, or sensitivity.
• When courts focus only on what was said, rather than why the right to say it matters, they weaken free speech and make the country vulnerable to emotional outrage and public pressure.

A 24-year-old man posted on social media, criticizing Prime Minister Modi after the May 2025 ceasefire with Pakistan following Operation Sindoor.

• Was the post in bad taste? Maybe. But "taste" is not a constitutional rule.
• The Allahabad High Court denied the plea to cancel the FIR, stating that "emotions cannot overflow to a point where national leaders are brought into disrepute".

This reasoning reverses the core idea of our Constitution: The citizen is meant to hold the state accountable, Not be treated like a child punished for speaking too freely.

The shift from protecting rights to managing feelings risks turning free speech into a privilege, not a right.

Judicial Shifts in Interpreting Free Speech under Article 19(1)(a)

• Traditional Interpretation: Article 19(1)(a) was meant to safeguard individual liberty by limiting state power over speech.
• Recent Trend: Courts now seem to treat this right as a conditional licence, where speech is evaluated through behavioural standards, often not codified in law.
• These conditions are increasingly defined by perceived dignity, national sentiment, or public outrage, rather than legal thresholds like incitement or defamation.

Case Studies Reflecting this Shift

Dangerous Precedents Being Set

• Courts asking for apologies for lawful speech: Legitimises mob outrage or majoritarian sentiment as a valid legal standard. Undermines the principle of constitutional protection from popular disapproval.
• Subjective thresholds like offence, taste, or sentiment: Replace clear legal standards with emotional benchmarks. Allow anyone claiming offence to trigger judicial action.

Wider Implications

• Judicial endorsement of cultural policing: Encourages self-censorship. Turns courts into arbiters of social decorum instead of protectors of freedom.
• Expression judged by acceptability rather than legality: Violates the core idea that free speech exists precisely to protect unpopular views. Hurt sentiments now a legal threshold: Courts risk transforming into forums that validate fragility rather than uphold liberty.

A misreading

1. Emotional Reaction ≠ Legal Harm

• Emerging Pattern: Courts are equating emotional distress or offence with legally actionable harm.
• Constitutional Misreading: Article 19(2) permits restrictions only on specific grounds: public order, decency, morality, defamation, incitement to an offence, etc. Mere anger or offence is not a valid ground for restriction.
• Democratic Risk: Democracies thrive on disagreement and dissent. Judicial policing of emotional triggers weakens constitutional protections.

2. Outrage as a Litigation Strategy

• Judicial encouragement of apologies or moral policing: Sets up a dangerous incentive structure: more outrage → more litigation.
• Effect: Emboldens mobs, trolls, and serial litigants. Chilling effect on speech: fear of being dragged into legal battles deters critical commentary.

Illustrative Case Examples

Judicial Overreach and Its Structural Flaws

• Apologies become judicially coerced: Courts resemble confessional booths, where speech is judged by remorse, not reason.
• Psychological and legal pressure: Summons, FIRs, and investigations create a chilling effect on dissent, even without conviction.
• Reinforcing Principle-Centric Free Speech: Current trends need correction to protect constitutional boundaries for restriction (Art. 19(2)).

The signal to the citizen

• Vague laws like sedition and shifting public order clauses must be interpreted with a bias toward liberty.
• The “chilling effect” doctrine, though acknowledged in Indian courts, is rarely applied with institutional courage.
• The issue affects everyday citizens:
  • YouTubers are told to bleep jokes.
  • Professors are dragged to court for tweets.
  • Filmmakers are forced to apologise for cultural or linguistic pride.

Conclusion

•  Judges are guardians of the Constitution, not enforcers of cultural comfort. Their role is to protect free speech, not soothe listeners. 
•  When courts chill speech in the name of sentiment, freedom quietly erodes. This growing sensitivity confuses harmony with uniformity and respect with restraint. 
•  Apologies should never be a legal requirement, nor should speech need validation to be legitimate. India’s Republic was born from protest, not politeness. 
•  As Dr. B.R. Ambedkar said, the world owes much to those who dared to challenge authority. Our judiciary must defend the right to speak—especially when it is unpopular.