Know about RIA

Governments the world over are asking the same questions: What is a good law? Why do laws fail? When is a law needed? How, exactly, should a law be designed?

The Indian federal government has no systematic method to answer these questions. But there is such a method. Since 1980, regulatory impact assessment (RIA) has become a global phenomenon in response to widespread pressures for more trenchant[tren-chunt(effective,प्रभावी)] and efficient legal governance.

Some 18 US States have also espoused[e'spawz(adopted,स्वीकार)] RIA. The Australian government uses RIA at federal level and in all States. Today, over 65 countries have adopted some form of RIA in making new laws and rules.

RIA is a method of estimating the likely impacts of government policy ‘before’ it is adopted, and comparing different policy designs to determine which produces the best consequence[kón-si-kwun(t)s(result,परिणाम)]. The impacts calculated in RIA are the benefits and the costs .
RIA is based on both a process and a method.

The process of RIA ensures that the assessment is open and pellucid[pu'loo-sid(transparent,पारदर्शी)], that the information used is reliable and not biased[bI-ust(partial,पक्षपातपूर्ण)].
The method of RIA is highly flexible. Over 20 different methods are used in RIAs around the world to examine various economic, social, and environmental impacts.

Benefits of RIA

The economic benefits of better regulation are substantial, since in countries similar to India the annual cost of government regulation accounts for 10-20 per cent of GDP. This means even
miniscule[mi-ni,skyool(small,छोटा)] improvements in regulatory efficiency can have large payoffs in national income.

The REACH regulation from the European Commission would have imposed €10 billion in costs on the European chemicals industry, as it was first written. The regulation was revised to make it easier to comply, without significantly changing benefits. The final cost was €2 billion. The RIA cost the Commission about €1 million, producing a social return on investment of 8,000 to one and saving thousands of jobs.

The benefits are likely to be similar or even larger in India than in the US or the EU because the negative effects of high regulatory costs, risks, and entry barriers are likely to be higher in India.

The World Bank has pointed out that “smart regulation” tools seem particularly relevant for developing countries where businesses compete in thin capital markets; face fierce[feers(violent,उत्तेजित)] price competition in exports and pressures from low-cost imports, among other reasons.

RIA is new to most regulators in India, and time is needed for full implementation. RIA is a transformational reform, which aims to affect how regulators think about their role, introduce new actors into policy procedures, and foster[fós-tu(devlop,विकसित)] more open and competitive policy dialogue.
To reach a sustainable level of RIA quality, India will need a clear strategy: clear targeting strategies, development of multi-level consultation strategies, more attention to data collection and quality, investment in training, effective quality control through central RIA units and ministerial accountability, better use of scarce[skehrs(hardly,अपर्याप्त)] scientific resources, and technical RIA manuals.

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