Institute of Chartered Accountants of India (ICAI), the Institute of Company Secretaries of India (ICSI) and the Medical Council of India (MCI) will be among the bodies that could cease to act as regulators of their respective profession, said one of the sources. (Source: Reuters)

The government is planning a comprehensive overhaul of certain watchdogs — which are simultaneously acting as the representative bodies of important professional services — by stripping them of their regulatory powers, as it seeks to remove any conflict of interests in their respective roles and ensure tougher oversight in accordance with the best international practices, sources told FE.

So, the Institute of Chartered Accountants of India (ICAI), the Institute of Company Secretaries of India (ICSI) and the Medical Council of India (MCI) will be among the bodies that could cease to act as regulators of their respective profession, said one of the sources.

However, they will continue to deal with other internal professional matters as they are doing now and the government will set up separate regulators for these professional services, added the source.

The commerce ministry is anchoring this proposal as it believes that having strong, independent regulators is an absolute prerequisite to project India as a potential global services hub, especially when the country is seeking to drum up supports for a trade facilitation agreement in services at the World Trade Organization, said another source.

Also, a regulator without any conflict of interest will be able to guide the government better without any bias. “If we want to emerge as a serious player in services, we have to align our regulatory mechanisms in the services sector with the best globally,” said the source.

“This is a good move. The government must create more regulators like Sebi or the Competition Commission Of India, which are proper regulatory organisations and not self-regulators. Self regulatory organisations, particularly those that are run mostly through elected representatives (like ICAI, ICSI), don’t regulate that effectively because elected people can’t do the disciplinary work well,” said a former senior official with the ICSI.

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Despite repeated attempts, ICAI and ICSI officials were not available for comments. The main decision-making body of these institutions are their councils, mostly comprising elected or nominated members. The MCI council has 100-odd members, while ICAI has 40 members and the ICSI 15.

In terms of membership, ICAI is touted as the second-largest professional accounting and finance body in the world, after the American Institute of Certified Public Accountants.