Panel moots 3rd party certification to reduce the regulatory burden

India needs to move towards a system of third party certification in most areas of regulation with accredited certifying agencies working jointly with sectoral regulators.

This would reduce the regulatory burden on enterprises and increase compliance, an expert committee has recommended. This will improve the ease of doing business.

In its report on prior permissions and regulatory mechanism commissioned by the Department of Industrial Policy and Promotion (DIPP), an expert committee headed by Ajay Shankar has said third party certification is the practical way forward, with other economies such as the EU also moving towards unbundling of regulatory function.

“It is recommended that credible third party certification be introduced in a planned and phased manner from prospective dates.

“From the date of the regulatory decision on third party certification, multiple players could emerge in a year’s time,” the report said.

For better compliance and credibility of the process, some percentage of the third party certification would need to be subject to random concurrent audit with stiff penalties cumulatively leading to even withdrawal of accreditation for laxity, it said. In designated industrial park zones, standards can be clearly laid down in areas relating to the environment, building bye-laws, safety and other norms.

“With such a pre-determined regulatory framework and effective system of third party certification could lead to doing away with multiple prior permissions altogether,” the report added.