SEBI employees are up in the arms against Finance Minister Nirmala Sitharaman. In a strongly worded letter to FM, the association of SEBI employees have opposed a proposal in the Budget that seeks to transfer 75 per cent of the regulator’s surplus funds to government coffers by terming it as additional tax on market participants.
Also, the letter calls FM’s proposal to subject Securities and Exchange Board of India (SEBI) to seek government approval for its annual expenditure as regressive. BusinessLine has the copy of the letter.
The Budget has proposed that SEBI should constitute a reserve fund and 25 per cent of the annual surplus of the general fund should be credited to this reserve fund. Moreover, the transfer to the reserve fund every year should not exceed the total annual expenditure of the preceding two years. After meeting all expenditures, SEBI should transfer the leftover 75 per cent of the surplus amount to the Consolidated Fund of India, according to the Budget proposal. A gazette notification to this effect will be issued after the Budget is passed in Parliament. Also, the Budget proposed that SEBI should take government approval for its annual expenditure. SEBI has a surplus of ₹3,170 crore as per its 2017 balance sheet, which is the latest available in public domain.
SEBI employee letter states, “Involvement of government in capital expenditure approval will not add any benefit to the institutional efficiency but rather slowdown decision making and would be contrary to the principal of minimum government and maximum governance.”
The letter reasons that Comptroller and Auditor General (CAG) conducts an audit of SEBI accounts and have till date not found a “single instance of imprudence.” Already, the capital expenditure plan of the regulator has to be approved by SEBI board, which has two government nominees on it. The employees have asked FM to ensure that autonomy of SEBI is maintained.
“SEBI’s standing as an autonomous regulatory body will be compromised due to the proposed requirement of the government for part of its expenses,” letter said.
CAG had first recommended transfer of surplus funds from regulators like SEBI and IRDA to Consolidated Fund of India.
Source- Business Line.