Panel flags inconsistent accounting practices in health regulatory bodies

What Happened

A parliamentary committee has flagged inconsistent accounting practices across India's central health regulatory bodies, including the National Medical Commission (NMC), the National Commission for Indian System of Medicine (NCISM), and the Dental Council of India (DCI).
The committee noted a significant increase in revenue generated by these regulatory bodies through application, inspection, and licensing fees following the revision of fee norms, but found that accounting standards and financial reporting practices varied widely across bodies — with some failing to conduct mandatory internal audits.
The panel raised concerns about the lack of a uniform accounting framework for statutory regulatory bodies under the Ministry of Health and Family Welfare and the Ministry of AYUSH, creating obstacles to effective parliamentary and public oversight.
The committee called for standardised auditing procedures, adoption of consistent accounting norms, and greater financial transparency in the operations of health regulatory bodies.

Static Topic Bridges

Health Regulatory Architecture in India

India's health sector is regulated by a network of statutory bodies established under specific Acts of Parliament. Following major legislative reforms in 2020, the older, corruption-prone Medical Council of India was replaced by the National Medical Commission, and similar restructuring was undertaken for the Indian systems of medicine. These bodies regulate medical education, professional conduct, institutional standards, and examination processes. Their revenues come from fees charged to medical colleges, practitioners, and institutions for registration, inspection, and licensing.

National Medical Commission (NMC): Established under the National Medical Commission Act, 2019 (operational from September 25, 2020); replaced the Medical Council of India; regulates modern medicine (MBBS and above)
National Commission for Indian System of Medicine (NCISM): Established under the National Commission for Indian System of Medicine Act, 2020; replaced the Central Council of Indian Medicine; regulates Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Sowa-Rigpa (AYUSH streams except Homeopathy)
Dental Council of India (DCI): Established under the Dentists Act, 1948; regulates dental education and practice
Pharmacy Council of India (PCI): Established under the Pharmacy Act, 1948; regulates pharmacy education and practice
Allied and Healthcare Professions Council: Established under the National Commission for Allied and Healthcare Professions Act, 2021

Connection to this news: Each of these regulatory bodies collects substantial revenue from the institutions and professionals it oversees. Without a uniform accounting framework, comparing fee structures, audit trails, and financial health across these bodies is difficult for Parliament or the CAG.

India's parliamentary committee system includes Department-Related Standing Committees (DRSCs) that shadow specific ministries. The Standing Committee on Health and Family Welfare is mandated to examine the demands for grants, legislation, and policy matters of the Ministry of Health and Family Welfare and the Ministry of AYUSH. It can call officials, examine annual reports, and scrutinise the functioning of autonomous and statutory bodies under these ministries. The committee's reports are non-binding but carry significant persuasive authority.

DRSCs: 24 in number, covering all central ministries; members drawn from both Lok Sabha and Rajya Sabha (21 members each)
The Standing Committee on Health and Family Welfare is one of the 24 DRSCs
Scope of scrutiny: Demands for grants, Bills referred, policies, and functioning of statutory/autonomous bodies
Committee reports: Presented to Parliament; government required to submit action taken reports (ATRs)
CAG (Comptroller and Auditor General): Under Article 148–151 of the Constitution, independently audits accounts of all bodies substantially financed by the Central Government; reports are laid before Parliament

Connection to this news: The committee's findings on inconsistent accounting in health regulatory bodies represent exactly the kind of cross-cutting oversight that DRSCs are designed for — identifying systemic governance gaps that ministry officials and individual regulators would not self-report.

Fee-Based Regulatory Revenue — Accountability Concerns

Statutory regulatory bodies in India often operate on a self-financing model, collecting fees from regulated entities to fund their operations. This creates a structural conflict of interest: a body that depends on fees from institutions it is supposed to regulate may have incentives to expand fee collection rather than enforce standards rigorously. When such bodies also lack standardised accounting, the risk of financial mismanagement or opacity increases. The Comptroller and Auditor General (CAG) under Article 149 of the Constitution is empowered to audit the accounts of central statutory bodies.

Health regulatory bodies generate revenue through: application fees (from colleges/practitioners applying for recognition), inspection fees (for regulatory visits), and licensing/renewal fees
Post-2020 reform: Fee norms for NMC, NCISM, and DCI were revised upward, increasing aggregate revenue substantially
Problem identified: No uniform chart of accounts, varying audit timelines, and some bodies not conducting mandatory internal audits
Article 149: "The Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States...as may be prescribed by or under any law made by Parliament"
CAG's Report on Central Autonomous Bodies is presented to Parliament annually under Article 151

Connection to this news: The committee's finding — that fee revenues have increased after norm revisions but accounting practices remain inconsistent — signals a governance gap. Growing regulatory revenue not subjected to standardised audit creates accountability risks, particularly given past controversies around the Medical Council of India that led to its dissolution.

National Medical Commission Act, 2019 — Key Governance Reforms

The NMC Act replaced the Medical Council of India, which was widely criticised for corruption, regulatory capture, and opacity. The NMC Act introduced four autonomous boards under the Commission's umbrella — the Undergraduate Medical Education Board (UGMEB), Postgraduate Medical Education Board (PGMEB), Medical Assessment and Rating Board (MARB), and Ethics and Medical Registration Board (EMRB). The Act also expanded the scope of regulatory oversight and mandated greater transparency in operations.

NMC Act, 2019: Passed August 2019; operational from September 2020
Replaced: Indian Medical Council Act, 1956
Four boards: UGMEB, PGMEB, MARB, EMRB — each with distinct mandates
Fee guidelines: NMC is empowered under Section 10(1)(i) to frame guidelines for fees in respect of 50% of seats in private medical institutions and deemed universities
Governance intent: Greater transparency, reduced regulatory capture, democtratised composition with government nominees and elected members

Connection to this news: Despite the institutional reforms under the NMC Act, the parliamentary committee's observations suggest that financial governance and accounting standards remain work-in-progress, with the new bodies not yet fully aligned on uniform reporting practices.

Key Facts & Data

Health regulatory bodies flagged: NMC, NCISM, DCI, and others under Ministry of Health and Family Welfare and Ministry of AYUSH
Revenue sources: Application, inspection, and licensing fees — increased following revision of fee norms
Core concern: Inconsistent accounting practices and varying internal audit compliance across regulatory bodies
NMC established: September 25, 2020 (under NMC Act, 2019; replaced MCI constituted under Indian Medical Council Act, 1956)
NCISM established: 2020 (under NCISM Act, 2020; replaced Central Council of Indian Medicine)
DCI established: 1948 (under Dentists Act, 1948)
Parliamentary oversight mechanism: Department-Related Standing Committee on Health and Family Welfare; CAG audit under Articles 148–151
Committee recommendation: Standardised accounting norms, uniform audit frameworks, and greater financial transparency