Parliamentary panel quizzes corporate affairs ministry on funding, track record of regulators

New Delhi: The Parliamentary committee on finance has asked the ministry of corporate affairs to explain a drop in funding for some regulators in the revised estimates for FY24. It has also sought information on the track record of regulators in handling cases and the status of executing policy announcements made by the government, two persons aware of the development said.

The panel, led by Bhartiya Janata Party’s MP Bhartruhari Mahtab, has given the ministry time till 11 October to furnish the information before a hearing is given to officials to discuss the matter, the persons said.

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The move is part of the panel’s examination of the demands for grants of the ministry of corporate affairs for 2024-25 and will form the basis for a report to be tabled in Parliament, said one of the two persons quoted above.

The communication seeking details of the funding for regulators and their performance came from the Lok Sabha secretariat’s branch dealing with the panel.

The panel wanted to know the share of successful prosecutions among the total number of cases investigated by the Serious Fraud Investigation Office (SFIO) and the steps planned for improving the track record.

The ministry’s latest annual report said the SFIO has filed 56 cases in various forums from January 2023 to end of March 2024.

Pendency details sought

The committee sought details of pending cases with Competition Commission of India (CCI) in the last three years, the reason for pendency and steps taken to lower this.

As per data available with the competition regulator, it disposed of 39 cases of anti-competitive conduct in FY23 and 23 were pending at the end of the year. It took about 21 days on an average to dispose of requests for merger approvals.

The House panel also asked how the amendments to the competition law enables the CCI ensure that mergers and acquisitions in the infrastructure industry do not lead to monopolistic and anti-competitive conduct in other sectors that are prone to such risks, the person said.

The panel wanted to know the status of the Digital Competition Bill and the money available for strengthening tribunals and setting up appellate tribunals. The ministry was also asked about the government’s position on creating a framework for group insolvency and the steps taken in this regard.

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The committee asked why funding for regulators Insolvency and Bankruptcy Board of India (IBBI), CCI, National Financial Reporting Authority (NFRA) as well as the National Company Law Tribunal (NCLT) was decreased in the revised estimate stage for FY24.

IBBI’s allocation was slashed from nearly ₹42 crore in the FY24 budget estimate to ₹19 crore in the revised estimate, CCI’s from ₹51 crore to nearly ₹50 crore and NFRA’s from ₹43.2 crore to ₹38.5 crore. NCLT’s budget came down from nearly ₹96 crore to about ₹87 crore, the House panel highlighted in its communication.

Revision of estimates

Close to the end of every financial year, the government revises the estimated funding to departments, regulators and other agencies originally made in the budget, based on fund utilization patterns and other factors. Sometimes, there are savings from certain schemes and programmes, which are reallocated to other areas after Parliament’s nod.

The House panel also wanted to know why the ministry’s overall funding got revised lower in the four years up to FY24. In the just concluded financial year, the original allocation for the ministry was ₹756 crore, which was revised to a little over ₹617 crore and the actual spending was about ₹591 crore.

In FY25 however, the budget estimate went up sharply as the ministry is implementing the PM internship scheme, for which ₹2,000 crore has been earmarked.

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The House panel wanted to know how the government proposes to improve budget utilization and align spending with the allocations this fiscal in order to improve overall budget planning.

The recommendations of the Parliamentary standing committee have a great persuasive value on the government but are not binding, explained the second person, who also spoke on condition of not being named.

Queries emailed to the Parliamentary standing committee, the ministry of corporate affairs, CCI, IBBI, NFRA and the NCLT on Tuesday seeking comments for the story remained unanswered at the time of publishing.