1. Introduction

Capacity building obligations for regulators refer to the legal, institutional, financial, scientific and administrative responsibilities involved in ensuring that regulatory authorities possess the competence and resources necessary to discharge their statutory duties effectively.

Regulators include bodies such as the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), the Competition Commission of India (CCI), the Telecom Regulatory Authority of India (TRAI), electricity regulatory commissions, environmental authorities and pharmaceutical regulators.

These bodies exercise powers that can significantly affect public health, economic activity, consumer welfare, fundamental rights and the environment. Their effectiveness therefore depends not only on the existence of legislation but also on trained personnel, adequate funding, technical expertise, reliable information systems and accountable decision-making.

In India, the legal framework does not establish one universal, independently enforceable obligation requiring every regulator to maintain a specified level of institutional capacity. Instead, such obligations arise from a combination of:

The regulator's enabling statute and delegated legislation.

Constitutional requirements governing public administration.

Principles of natural justice, reasoned decision-making and judicial review.

Sector-specific statutory and international obligations.

Government duties to establish and support institutions capable of implementing the law.

A useful starting point is the distinction between a regulator's obligation to perform its statutory functions and the State's responsibility to establish conditions under which those functions can realistically be performed. These duties overlap, but they are not identical.

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2. Meaning and scope of regulatory capacity building

Regulatory capacity building involves developing and maintaining the institutional ability to make lawful, informed, timely and effective decisions.

Human-resource capacity

Recruiting qualified officers, providing continuing legal and technical training, developing specialist teams and ensuring appropriate staffing levels.

Institutional and legal capacity

Establishing clear mandates, internal procedures, independent decision-making arrangements, enforcement mechanisms and coordination between public authorities.

Scientific and technological capacity

Maintaining laboratories, technical experts, digital systems, cybersecurity safeguards, data-analysis capabilities and access to independent scientific advice.

Financial and operational capacity

Providing sustainable funding, inspection facilities, investigation resources, audit systems and sufficient personnel to address the risks within the regulator's jurisdiction.

Accountability and review capacity

Enabling reasoned decisions, internal quality checks, public consultation, complaint handling, performance evaluation and compliance with judicial or appellate directions.

Capacity building is consequently more than employee training. It includes the organisational systems that allow expertise to be used lawfully and consistently.

3. Legal foundations of capacity building obligations

A. Constitutional principles in India

The Constitution of India does not expressly prescribe a general capacity-building duty for all regulatory authorities. Nevertheless, several constitutional provisions and doctrines influence how regulators must be organised and how they exercise their powers.

Article 14 — Equality and non-arbitrariness

Regulatory decisions must not be arbitrary, irrational or discriminatory. Authorities need adequate information, competent decision-makers and consistent procedures to satisfy this standard.

Article 21 — Life and personal liberty

Where regulatory decisions affect life, health, safety or personal liberty, deficiencies in technical expertise or administrative capability may contribute to unlawful or unreasonable action. Article 21 does not, however, automatically establish a particular staffing or budgetary entitlement for every regulator.

Article 19 — Protected freedoms

Economic and professional regulation must remain within constitutional limits. Regulators require sufficient legal competence to distinguish permissible restrictions from disproportionate or unauthorised interference.

Articles 32 and 226 — Constitutional remedies

The Supreme Court and High Courts can review unlawful regulatory action and, where legally justified, direct public authorities to perform their duties. Judicial intervention depends on the applicable law and the facts; it does not give courts unrestricted authority to design regulatory budgets or staffing structures.

B. Enabling statutes and sector-specific legislation

A regulator's principal duties generally arise from its establishing legislation.

The legal principle is that statutory powers must be exercised for their authorised purposes. Capacity building helps make this possible, but the exact duties concerning staffing, funding, reporting, investigations and expertise depend on the legislation governing each body.

C. Natural justice and procedural fairness

Regulators must possess sufficient procedural and legal competence to comply with the principles of natural justice where those principles apply. Relevant requirements may include:

Giving affected parties adequate notice.

Providing a meaningful opportunity to respond.

Considering relevant evidence and submissions.

Avoiding bias and conflicts of interest.

Giving reasons where required by law.

Institutional incapacity does not automatically invalidate every regulatory decision. However, a decision may be unlawful if the regulator's actual process fails to satisfy an applicable legal requirement.

D. International legal obligations

International law also recognises capacity building as an important element of effective regulatory governance, particularly in public health, environmental protection and biotechnology.

For example, Article 22 of the Cartagena Protocol on Biosafety addresses capacity building, including the development of human resources and institutional capacities in biosafety. Article 22(2) specifically refers to legal, institutional and administrative regulatory capacity.

The Protocol illustrates that capacity building may be an express international obligation for States Parties, rather than merely a desirable administrative policy. Its implementation depends on the applicable treaty provisions, the State's international commitments and relevant domestic law.

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4. Important case laws and their legal significance

The following judgments establish principles relevant to regulatory competence, accountability, institutional performance and lawful administration. They should not all be understood as direct rulings on a freestanding duty to train or fund regulators.

Case 1. BSES Rajdhani Power Ltd. v. Union of India (2025)

Supreme Court of India · 2025 INSC 937 · Decided 6 August 2025

This is a particularly relevant recent Indian decision concerning the duties and accountability of statutory regulators.

Facts and legal issue

The litigation concerned the creation and prolonged continuation of regulatory assets by electricity regulatory commissions. Regulatory assets permitted revenue gaps to be recovered in future tariffs, but their accumulation raised concerns about financial sustainability, delayed recovery and consumer interests.

Decision and principles

The Supreme Court emphasised that regulatory commissions must perform their functions in accordance with the Electricity Act, applicable policies and rules, regulations and directions of the Appellate Tribunal for Electricity (APTEL).

The Court addressed the need to manage regulatory assets within legal limits, exercise regulatory functions efficiently and avoid regulatory failure and regulatory capture. It also affirmed the role of APTEL in demanding explanations, monitoring compliance and issuing appropriate directions.

The judgment prescribed principles for limiting and liquidating regulatory assets, including a guiding limit of 3% of approved annual revenue requirement and time-bound liquidation requirements. The treatment of existing regulatory assets was separately addressed.

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Relevance to capacity building

The decision supports the proposition that regulators must have the practical and institutional ability to:

Analyse complex financial and tariff information.

Monitor regulated entities and emerging risks.

Make timely decisions supported by evidence.

Implement statutory duties rather than indefinitely postpone them.

Comply with appellate directions and remain accountable for regulatory failure.

Legal significance: A regulator's specialised status does not excuse persistent failure to discharge its statutory responsibilities. The judgment concerns electricity regulation specifically, rather than a universal legal rule requiring all regulators to maintain particular staffing or training levels.

Case 2. Maneka Gandhi v. Union of India (1978)

Supreme Court of India · (1978) 1 SCC 248

Facts

The case concerned the impounding of Maneka Gandhi's passport and the constitutional validity of the procedure followed by the government.

Principle established

The Supreme Court interpreted Article 21 in conjunction with constitutional guarantees, emphasising that a procedure affecting personal liberty must satisfy applicable standards of fairness and reasonableness. The judgment also reinforced the importance of natural justice in administrative action involving civil consequences.

Connection with regulatory capacity building

Regulatory authorities need sufficient legal expertise and suitable procedures to understand constitutional limitations, assess the consequences of their decisions and provide appropriate procedural safeguards.

For instance, an authority suspending a licence or restricting a person's professional activity should be capable of identifying the applicable hearing requirements and ensuring that its decision is legally sustainable.

Legal significance: The case establishes constitutional standards governing administrative action. The connection to capacity building is an implication of those standards, not an express judicial order to create training programmes.

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Case 3. A.K. Kraipak v. Union of India (1969)

Supreme Court of India · (1969) 2 SCC 262

Facts and issue

The case concerned the selection of candidates for the Indian Forest Service and the role of a selection-board member who was himself a candidate for selection.

Principle established

The Supreme Court stressed that the distinction between administrative and quasi-judicial functions cannot be used to avoid the requirements of natural justice. The purpose of those requirements is to prevent injustice and ensure fair decision-making.

Connection with regulatory capacity building

Regulatory bodies frequently combine investigative, administrative, licensing and adjudicatory functions. They therefore need systems capable of identifying:

Actual or potential conflicts of interest.

Circumstances requiring recusal.

The distinction between investigation and adjudication.

Procedures for fair hearings and impartial decisions.

Training, ethical safeguards and documented decision-making procedures can help institutions meet these requirements.

Legal significance: The judgment provides a foundation for procedural fairness in public administration. It does not independently establish a general obligation to provide a particular amount of funding or training.

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Case 4. Tata Power Co. Ltd. v. Maharashtra Electricity Regulatory Commission (2023)

Supreme Court of India · (2023) 11 SCC 1

This decision is relevant to the relationship between statutory electricity regulation, regulatory policy and tariff determination.

The legal principles discussed in the later BSES Rajdhani Power judgment include the significance of the National Tariff Policy in guiding regulatory commissions. The 2025 judgment explains that the policy is a material consideration even where it does not independently bind a State Commission in every respect; applicable regulations may incorporate its requirements into the enforceable regulatory framework.

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Connection with capacity building

Regulators must be able to interpret statutory provisions, applicable rules, policies and their own regulations together. Insufficient legal and economic expertise can undermine the consistency and sustainability of regulatory decisions.

Legal significance: The case illustrates the importance of regulatory interpretation and technical competence. It should not be cited as establishing an independent, universally applicable capacity-building obligation.

Case 5. Vijay Rajmohan v. Central Bureau of Investigation (2023)

Supreme Court of India · (2023) 1 SCC 329

The Supreme Court's discussion of accountability, subsequently quoted in its 2025 BSES Rajdhani Power judgment, identifies three central dimensions of accountability:

Responsibility: Duties and performance obligations must be identifiable.

Answerability: Authorities must be able to explain their decisions.

Enforceability: Appropriate corrective action must be available when duties are not performed.

These principles provide a useful framework for assessing regulatory institutional capacity. A regulator needs defined responsibilities, competent decision-makers, systems for recording reasons and mechanisms for correcting failures.

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The case is relevant to administrative accountability, although it is not itself a general judgment imposing specific capacity-building requirements on regulatory agencies.

Case 6. Shirley v. Secretary of State for Housing, Communities and Local Government (2019)

Court of Appeal of England and Wales · [2019] EWCA Civ 22

This case concerned the scope of responsibilities assigned to competent authorities under European Union air-quality legislation.

The Court examined the statutory designation and specific functions of the competent authorities. It rejected the idea that the relevant provisions created a general responsibility extending beyond the activities expressly covered by the legislation.

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Connection with capacity building

The case illustrates why regulators need a clear understanding of their statutory mandates. Capacity building cannot enlarge an authority's jurisdiction: expertise must be directed toward the functions that legislation actually confers.

Legal significance: Regulatory capacity and regulatory authority are distinct. An institution must have both the competence to act and the legal authority to take the action in question.

Case 7. International health regulations and public-health preparedness

International materials concerning the World Health Organization's International Health Regulations (2005) illustrate the importance of developing and maintaining national capacities to detect, assess, notify and respond to public-health risks.

Articles 5 and 13, together with Annex 1 of the Regulations, establish relevant preparedness and response requirements for States Parties. The 2024 amendments broadened aspects of these requirements, including preparedness and response capabilities.

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Connection with capacity building

Public-health regulators need effective surveillance systems, trained personnel, laboratories, reporting mechanisms, emergency plans and inter-agency coordination.

Legal significance: These obligations operate within the international health-law framework and apply to States Parties according to the applicable instrument. They should not be treated as an identical, directly enforceable staffing mandate for every individual regulatory agency.

5. Core legal duties associated with capacity building

The following table distinguishes established legal duties from broader institutional measures that may be needed to fulfil them.

The distinction is important: not every good governance practice is independently enforceable in court. Its legal status depends on the source of the duty and the circumstances in which it is invoked.

6. Duties of governments and regulators

Capacity building requires coordinated action by more than one institution.

Government and legislature

Establish a clear legal mandate.

Create appropriate institutional arrangements.

Provide funding through lawful budgetary processes.

Avoid unnecessary interference with independent statutory functions.

Provide mechanisms for oversight and accountability.

Regulatory authority

Identify staffing and expertise gaps.

Develop training and professional standards.

Adopt transparent procedures and internal controls.

Prioritise inspections and enforcement according to risk.

Monitor performance and correct recurring weaknesses.

Appellate bodies and courts

Review the legality of regulatory action.

Enforce statutory and procedural requirements.

Require compliance with lawful directions.

Order appropriate remedies where a legal violation is established.

A regulator cannot necessarily compel the legislature or government to provide every resource it requests. Equally, a government cannot assume that creating a regulator on paper is sufficient if the institution is unable to perform the functions that the law assigns to it.

The legal question in a particular dispute is whether the resource deficiency has caused, or is likely to cause, a breach of an identifiable legal obligation.

7. Regulatory capacity building in specialised sectors

A. Biotechnology and biosafety

Biotechnology regulation requires scientific, environmental, medical and legal expertise. Authorities may need to assess genetically modified organisms, evaluate environmental risks, oversee laboratory safety and monitor compliance.

Article 22 of the Cartagena Protocol on Biosafety is particularly relevant because it expressly addresses capacity building and the development of legal, institutional and administrative regulatory capacity.

Relevant institutional measures include:

Specialist risk-assessment teams.

Access to qualified laboratories and independent scientific advice.

Procedures for reviewing biosafety evidence.

Environmental monitoring and emergency-response systems.

Public participation and information-sharing mechanisms.

The legal objective is not simply to expand technical knowledge but to enable lawful, scientifically informed and accountable regulatory decisions.

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B. Financial regulation

Financial regulators need expertise in accounting, economics, financial technology, market surveillance, prudential risk and cybersecurity.

Weak capacity can make it difficult to detect fraud, assess systemic risk, investigate market manipulation or respond to rapidly evolving financial products.

The relevant legal obligations must be identified in the legislation governing the particular regulator, together with any applicable reporting, supervision, enforcement and governance requirements.

C. Environmental regulation

Environmental authorities require technical expertise, monitoring equipment, reliable environmental data and the ability to assess cumulative impacts.

International environmental law places substantial emphasis on due diligence and effective regulatory frameworks where States are required to protect against environmental harm. The precise obligation depends on the relevant legal rule and factual circumstances.

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D. Public-health regulation

Public-health regulators need laboratory capacity, disease surveillance, pharmacovigilance, emergency planning and coordination with healthcare providers.

International health-law obligations demonstrate that preparedness capacity can be part of a State's legal commitments rather than merely a matter of administrative preference.

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8. What happens when a regulator lacks capacity?

A shortage of qualified personnel, inadequate funding or weak technical infrastructure does not automatically render every regulatory decision unlawful. The legal consequences depend on the nature of the deficiency and the duty breached.

Potential consequences include:

1. Judicial review. Affected persons may challenge decisions that are arbitrary, procedurally unfair, beyond jurisdiction or otherwise contrary to law.

2. Remedial directions. Courts or statutory appellate bodies may require an authority to reconsider a matter, perform a neglected statutory function or comply with applicable directions.

3. Institutional accountability. Internal disciplinary processes, statutory reporting, audits or other accountability mechanisms may apply, depending on the governing framework.

4. Regulatory liability. A claim for compensation or other relief requires an applicable legal basis; a general allegation of insufficient capacity does not itself establish liability.

5. International responsibility. Where a State breaches an applicable international obligation, questions of international responsibility may arise. The precise standard, attribution rules and available remedies depend on international law.

The BSES Rajdhani Power judgment is a useful example of a court addressing a demonstrated regulatory failure through statutory accountability and corrective directions. It does not establish that every administrative delay or staffing shortage is actionable in the same way.

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9. A practical framework for assessing compliance

A regulator's capacity-building arrangements can be assessed against the following questions.

Regulatory capacity checklist

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Legal mandate

Are the regulator's functions, powers and responsibilities clearly defined?

Human resources

Are staffing levels and professional qualifications appropriate to the functions assigned?

Technical resources

Does the authority have reliable data, equipment, laboratories or access to independent expertise where necessary?

Procedural safeguards

Are decisions made through fair procedures, with adequate records and reasons where required?

Operational effectiveness

Are inspections, investigations, reviews and enforcement actions completed within applicable requirements?

Accountability

Are performance monitored, failures investigated and lawful judicial or appellate directions implemented?

Financial sustainability

Are resources planned and allocated through lawful and transparent arrangements?

Reset checklist

This checklist is an analytical tool, not a statutory certification. A negative answer identifies an issue for further investigation; it does not, without more, establish a legal violation.

10. Remedies and enforcement mechanisms

Where a capacity deficiency contributes to unlawful regulatory conduct, the available remedy depends on the governing law.

Writ jurisdiction: Articles 32 and 226 may provide remedies for violations of applicable constitutional or public-law duties.

Statutory appeals: Sector-specific legislation may allow appeals against regulatory orders.

Tribunal supervision: An appellate tribunal may issue directions within its statutory jurisdiction, as illustrated by the role of APTEL in BSES Rajdhani Power.

Internal review and audit: Regulatory frameworks may provide for reconsideration, supervisory review, performance audits or investigation of misconduct.

International compliance processes: Where treaty obligations apply, the relevant treaty's reporting, cooperation and compliance mechanisms may be available.

A court will generally distinguish between requiring an authority to perform a legal duty and prescribing the precise administrative means by which it must perform that duty. The latter may involve matters of institutional discretion, budgetary priorities and technical judgment, subject to the applicable law.

11. Critical legal analysis

Three propositions are particularly important.

First, capacity building is sometimes an express legal obligation and sometimes an implied institutional necessity. Where a statute or treaty expressly requires capacity development, the relevant text determines the duty. In other situations, the need for expertise and resources may follow from duties to perform statutory functions effectively, but the precise enforceable obligation must still be established.

Second, independence does not eliminate accountability. A specialised regulator needs sufficient autonomy to make objective decisions, but it remains bound by its enabling statute, constitutional requirements and lawful appellate directions. Excessive political interference and regulatory capture can undermine institutional effectiveness.

Third, capacity building must be proportionate to regulatory responsibilities. A small licensing authority and a national financial or biosafety regulator may require very different resources. The appropriate level of capacity depends on the complexity of the regulated activity, the risks involved, statutory requirements and the consequences of regulatory error.

These principles support a balanced approach: the law should not treat every administrative shortcoming as misconduct, but neither should a public authority be permitted to use persistent incapacity as a blanket excuse for failure to perform mandatory duties.

12. Conclusion

Capacity building obligations for regulators form an important part of effective public administration, statutory compliance and accountable governance. Their legal foundation may arise from constitutional principles, enabling legislation, sector-specific rules and applicable international treaties.

The Indian Supreme Court's decision in BSES Rajdhani Power Ltd. v. Union of India (2025) provides a particularly strong example of judicial enforcement of statutory regulatory duties and institutional accountability. Maneka Gandhi and A.K. Kraipak supply foundational principles of fairness and lawful administrative decision-making, while international biosafety and public-health instruments demonstrate how capacity development can be expressly required by international law.

The central legal proposition is therefore:

A regulator must possess, develop or obtain the competence and institutional support reasonably necessary to discharge its legally assigned functions, to the extent required by the applicable law. Whether a particular deficiency creates an enforceable breach depends on the precise statutory, constitutional or international obligation, the facts of the case and the remedies available under the relevant legal framework.

This explanation is an academic overview, primarily from an Indian public-law perspective. For litigation, statutory interpretation and the precise scope of an enforceable capacity-building obligation, the governing legislation and the complete judgments should be examined.