To keep rogues in check, you need real regulation |
When IndiGo cancelled thousands of flights earlier this month and exposed India’s vulnerability to a quasi-monopoly, it was tempting to blame it all on one company’s ‘rogue behaviour’. But scratching the surface reveals a deeper malaise: a chronic weakening of India’s regulatory institutions and a form of tainted capitalism where dominant private players face no real accountability.
Indian regulators are meant to be quasi-judicial bodies — powerful enough to discipline the biggest corporations. In principle, they play a role analogous to the courts: interpreting rules, enforcing compliance and protecting public interest. In practice, most regulators resemble departments inside ministries, staffed by junior officers who simply cannot stand up to billion-dollar incumbents.
Contrast this with the United States, where even a junior federal judge could issue adverse rulings against the sitting President Donald Trump, against his whimsical tariffs. In India, the median regulatory staffer is neither empowered nor insulated. They are expected to regulate conglomerates whose annual profits exceed the regulator’s entire budget — and whose influence networks reach deep inside government.
The result is predictable: regulatory hesitation, delayed enforcement and a culture of looking away until a crisis becomes impossible to ignore.
Long before the present airline fiasco, the telecom sector, also inching towards a duopoly, offered a clear example. Over the past two decades, spectrum auctions were repeatedly followed by post hoc rule changes — in pricing, revenue sharing, adjusted gross revenue (AGR) and merger norms.
Policy shifts came not through transparent processes but through continuous firefighting and lobbying. Companies bet on getting rules changed later, because history suggested they would. Regulation was characterised by volatility, not predictability.
This is the antithesis of the rule of law. When rules are unstable, discretionary and revisable under pressure, firms learn that the real game is not competition or efficiency but regulatory capture.
The NITI Aayog–CRISIL report on airport PPPs........