The government is pushing ahead with its plan, underlined in Union Budget 2019, to transfer 75% of market watchdog Securities and Exchange Board of India’s (Sebi) surplus to the Consolidated Fund of India, two government officials familiar with the plan said, adding that other financial sector regulators such as the Insurance Regulatory and Development Authority (Irda) and the Pension Funds Regulatory and Development Authority will also be required to do so.
Sebi and some of the other regulators initially opposed the plan, citing concerns about loss of autonomy. Also, but the government wants to go ahead with its plan. However, and finalize the transfer before the next budget presented on February 1, 2020.
Government to transfer 75% of market watchdog Securities and Exchange Board of India’s (Sebi) surplus to the Consolidated Fund of India
The move would appear to be motivated by a desire to streamline processes. However, address issues raised in a report by the government’s auditor Comptroller and Auditor General (CAG). If the transfers happen, a few thousand crores will add to the Consolidated Fund of India. However, which won’t hurt the cause of the fiscal deficit, although it won’t make a material difference.
“There has been some resistance by certain regulators on the grounds of independence, but the government is of the view that merely drawing money from CFI (Consolidated Fund of India) for salaries and other expenditures will not curb their independence. Even, the judiciary gets money from CFI without compromising its independence,” one of the officials said on condition of anonymity.
Sebi’s surplus settled with an amendment in section 14 of the SEBI Act, 1992
The second official, who too asked not to name. Also, said the issue regarding Sebi’s surplus settled with an amendment in section 14 of the SEBI Act, 1992. The regulator has no choice but to comply with this, he added.
According to the amended law, Sebi can keep only 25% of its annual surplus. Also, which should not exceed its total annual expenditure in the preceding two financial years. The balance shall transferred by the market regulator to CFI. According to the officials, Sebi’s surplus was Rs 3,606 crore as on March 31, 2018.
Email queries sent to the finance ministry, DEA, Sebi, and Irda did not elicit any response.
A 2016-17 audit report of CAG titled “Accounts of the Union Government” said that 14 regulators had a corpus of Rs 6,064.08 crore as on March 31, 2017, which should be factored in the government’s revenue stream, in keeping with an older January 2005 order of the Department of Economic Affairs (DEA). According to the CAG audit report for 2016-17, Sebi had a surplus of Rs 1,672 crore and Irda, Rs 1,322 crore.
