FSLRC members handsomely “compensated” for their “contribution”

In a response to a Moneylife RTI, the Ministry of Finance has revealed that Rs4.72 crore of taxpayer’s money was spent on the members of the Financial Sector Legislative Reforms Commission-FSLRC. It is time to standardise compensation norms of those who provide policymaking inputs

A reply to Moneylife Right to Information (RTI) application revealed that the Financial Sector Legislative Reforms Commission (FSLRC) has spent at least Rs4.72 crore of taxpayer’s money since its inception in March 2011. It was also found out that some members were being paid huge amounts of taxpayer money for their “contributions”. For example, we found out that Justice (retd) BN Srikrishna, who used to be the judge for the Supreme Court and headed the FSLRC, was paid Rs40.53 lakh over three years for heading the Commission! 

Moneylife filed an RTI to find out how much of taxpayers’ money went into the Commission since inception. Here is what how much FSLRC members were being paid since the Commission’s inception in March 2011.

FSLRC Members

Paid  (Rs in lakh)

Justice (Retd) BN Srikrishna


Justice (Retd) Debi Prasad Pal


Dr PJ Nayak, ex-country head, Morgan Stanley


KJ Udeshi, ex-Deputy Governor, RBI


Yezdi H Malegam, practising accountant


Jayanth R Varma, academic


M Govinda Rao, academic


Late C Achuthan, ex-jusrist


Dhirendra Swarup, formerly ministry of finance


CKG Nair, Secretary, FSLRC


Bobby Parikh, Managing Partner, BMR & Associates


Raj Shekhar Rao, Advocate


Somasekhar Sundaresan, Advocate



The remuneration, fees and compensation is just one part of the expense paid to these members. We also found out that the FSLRC spent huge amounts of money on ferrying members to and forth, feeding and providing them with food/accommodation, reimbursement of office expenses and conveyance and “other assorted expenses” (whatever this means). The table below shows how much were spent on each of these expense heads, for each member of the FSLRC and its various working group committees, since March 2011:

Expenses Head

Total (Rs in lakh)



Food and Accommodation


Office expenses and conveyance


Other assorted expenses



Some of the members of the FSLRC are very well positioned in the commercial world and earning fat compensation or fees. For example, Dr PJ Nayak was the country head of Morgan Stanley at the time of his being appointed to FSLRC. This is a coveted position in a global firm, which would have fetched crores in compensation for Dr Nayak, a former bureaucrat. Yet, he had no problem in picking up a sizeable amount (Rs20 lakh) for his “services” to FSLRC. Another member, Jayant Varma, a well-known professor of Indian Institute of Management Ahmedabad-IIM-A (also, partly a taxpayer-funded institute), also got Rs20 lakh. Three others are part of flourishing professional-services firms.

While these handpicked “thought leaders” probably deserved to be compensated for their contribution to policy making, even though the report may only gather dust, our RTI application also revealed that there was no compensation policy in place. Other well-known personalities like Aditya Puri, Ravi Narain, Janmejeya Sinha and Naina Lal Kidwai were paid nothing for their work as members of working groups. In fact, members of the Working Groups of FSLRC were not paid at all.

Indeed, there is no standardisation on how these committees are formed and how much members should be paid, if at all, for a service, which is not commercial and in the nature of public service. For instance, while this was a Commission, which had a very wide canvas in trying to suggest sweeping legislative changes, there have been many important committees set up by various regulators where members were paid nothing for their public service. Members of SEBI’s Advisory Committees (primary market, secondary market and mutual funds) are not paid anything either. Until now, members to these committees saw some honour and prestige in serving as members. Many from the industry also saw this as a tool to network and further their business interests. Now, they can expect direct fat compensation as well, apart from indirectly exploiting their public-service role.

Deepak Gupta
8 years ago
The time duration for which the compensation was paid, is mentioned only for Justice Srikrishna. It is mentioned as 3 years. So, 40Lacs comes to just about 13Lac per year.

For a person of his eminence and experience, that is hardly a pay that anyone will complain about.

The real problem here is the absence of clear guidelines for such appointments. This may create room for misuse in the future, and should be taken care of.

That four members of the commission have written dissent notes - how is that relevant to the compensation paid to them? I'm sure you are not suggesting that people should not not dissent (so, leave their honest opinions behind and become yes men) only because they are being paid for their time?
Vinay Shah
8 years ago
The entire report is the brain-child of Ajay Shah. It is he alone who had laboriously drafted the report. What was the compensation received by him?
8 years ago
In the history of independent India FSLRC was probably the 2nd largest undertaking in writing new laws. This was an immense project with had a dedicated research team working full time for 2 years. How can you question their compensation?

What you should be questioning is why the report is 'gathering dust' after so much money being spent. Not why this money was spent to begin with.
Sucheta Dalal
Replied to Parikshit comment 8 years ago
Yes we can question their compensation. Many who have drawn lakhs of rupees hold full time jobs, where their annual earnings are in crores.
On the other hand many of us have served on innumerable committees where even our conveyance is not paid.
We need to know the basis on which these decisions are made. The basis on which consultants and lawyers are selected and who they decided to engage with and who they leave out.
The biggest surprise is this -- the four key members of the FSLRC have written dissent notes. What on earth kind of report is this? Who dictated the final report? Who dominated it so much that industry leaders were reduced to writing separate dissents?
There is a lot about the FSLRC that is not transparent and we would like to know what really happened during the deliberations.
G A Joseph
8 years ago
This report raises one ominous question. Is there not even one big man in our country who is willing to do something for the nation after retiring from high positions. If their rise to top positions has only add to their greed for money and they continue to seek more money after retirement selling their opinions, it is high time that post retirement engagements be made on honorary basis so that persons with social commitment and love for the country and its institutions come forward to provide guidance. Else let serving officials form committees and prepare policy documents. One is at a loss to understand what precious thing retirement adds to the wisdom and knowledge of these people that the society pays so heavy a price for this immeasurable commodity.
nagesh kini
8 years ago
Great report Aditya!
Pray what is the fate of the ground level implementation of this report? The MOF ought to come clean more particularly on the dissents.
While reimbursement of the actual out-of-pocket expenses is OK as also the travel and stay what is the criterion for the fat remuneration?
Most of the inputs will have come from the equally distinguised members of the working groups but they get nothing?
MG Warrier
Replied to nagesh kini comment 8 years ago
Nagesh Kini

Your concern about dissent is shared by many. In my article on FSLRC published by Moneylife.in, I observed:
It would appear that the Commission did not get opportunity to understand the present relationship between the RBI and GOI. The regulatory apparatus plus legislations in financial sector in India are in working condition. The FSLRC’s effort to re-invent them has already pushed the present regulators and supervisors to a confused state.

P J Nayak, inter alia observed in his dissenting note asunder:
“The Commission now arrests and partly reverses this directional movement, and it is with apprehension that one must view the very substantial statutory powers recommended to be moved from the regulators (primarily RBI) to the finance ministry and to a statutory FSDC, the latter being chaired by the finance minister. The Commission has recommended that direct statutory powers be vested in the government in matters of (i) Capital Controls and (ii) Development. The statutory empowerment of the FSDC encompasses (iii) Inter-Regulatory Co-Ordination; (iv) Identification and Monitoring of SIFIs; and (v) Crisis Management. This transfer of powers collectively constitutes a profound shift in the exercise of regulatory powers away from (primarily) RBI to the finance ministry. The finance ministry thereby becomes a new dominant regulator.

“To rearrange the regulatory architecture in this manner, requiring new institution-building while emasculating the existing tradition of regulators working independently of the government, appears unwise. There is no convincing evidence which confirms that regulatory agencies have under performed on account of their very distance from the government; indeed, many would argue that this distance is desirable and has helped to bring skills (and a fluctuating level of independence) into financial regulation.”

No point in doing an MRI of FSLRC report or the dissenting notes. Application of “collective wisdom” is conspicuous by the absence in the whole affair. Some vested interests are itching for a truncated central bank with diminished role with no say in the non-bank financial sector, the government securities market and the foreign exchange market. This implies that the RBI would have no say in the management of the exchange rate and thereby in the forex reserves. Add to this the Commission’s view on government debt management. The Commission opts for a separate Debt Management Office (DMO), totally separated from the RBI, which is the dispensation North Block has been trying to push and RBI has been resisting for valid reasons for a long time now.
8 years ago
has there been a change in govt rules in, certain cases, that
it is allowed to function like companies-where 'sanction by appropriate person' is more important than the 'propriety aspect' ?
MG Warrier
8 years ago
Transparent norms for compensation packages, where public funds are involved (Here no need to get confused about the meaning of public funds- Organisations dependent on funds from public, whether as tax or as share capital contribution are all handling public funds and have only ‘Trusteeship’ rights on the resporces) need to be evolved. Thank you Moneylife for exposing the absence of any norm in this area.
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