Evaluating India's Energy Ambitions: Evidence from Electricity Generation Project-Level Data

by Upasa Borah, Akshay Jaitly and Renuka Sane.

India's electricity demand has been growing rapidly, at 9% per annum since 2021. Meeting this demand by 2030 would require around 777 GW of installed capacity, as estimated by the Central Electricity Authority (CEA). At the same time, India has committed to achieving 500 GW of installed non-fossil capacity by 2030. A study by CEEW (2025) finds that meeting this target would require adding around 56 GW of non-fossil capacity every year between 2025 and 2030, failing which India would need an additional 10 GW of coal-based capacity to meet future demand. There is little doubt that renewable energy in India has seen a sharp growth, with 74 GW in 2018 to 162 GW by the end of 2024 (excluding large hydro and nuclear projects), driven by falling renewable energy prices, and policy support like subsidies for developers, waivers on inter-state transmission charges, Green Energy Corridor investments, changes in Green Open Access Rules and various state-level initiatives that signal policy commitment to the sector. In 2025 alone, the country added 45 GW of renewable capacity.

However, the next phase of the transition is likely to be more complex. India is now facing new challenges regarding grid integration and transmission infrastructure, leading to delays in commissioning projects and curtailment of operational projects. As of June 2025, around 50 GW of awarded renewable capacity was stranded due to a lack of buyers, transmission constraints or disputes over land and environmental clearances. This results in time and cost overruns, dampening investor confidence.

In this backdrop, our paper Evaluating India's Energy Ambitions: Evidence from Electricity Generation Project-Level Data studies how electricity generation projects evolve from announcement to completion. Using project-level data from the Centre for Monitoring Indian Economy (CMIE) CapEx database, we analyse 8,540 projects announced between January 1957 and December 2024 to understand how project size, cost, ownership, energy technology and location influence project timelines. We ask,

1. How many projects have been announced and of them, how many have been implemented and completed? What is the time taken?
2. Given the projects currently in the pipeline, how likely is India to meet the 2030 targets?
3. How do factors like project size, geography and developer characteristics influence the completion timelines and probabilities?

From announcement to completion

We find a significant divergence between projects announced and completed: of the total announced conventional (CE) and renewable (RE) capacity, only 15% and 9% have been completed, respectively. Announcement here refers to events like signing of MoUs, inviting bids, seeking approvals or preparing feasibility reports and may differ from official statistics that use alternative definitions of project status (Borah et al., 2025). The next stage in a project lifecycle is beginning implementation, which includes events like awarding contracts, securing financing, obtaining approvals or beginning construction, indicating a deeper commitment of resources. Even among this set of projects that have been implemented, completion rates remain low: 30% of CE and 22% of RE capacity have been completed. The timelines from announcement to implementation and implementation to completion vary significantly among different technologies, with solar and wind having the shortest timelines.

How much capacity will be added by 2030?

We used an accelerated failure time survival model to estimate the completion probabilities of projects currently in the pipeline (i.e. announced or under implementation as of December 2024). Applying a probability threshold of 0.5, i.e. excluding projects with less than 50% chance of completion by 2030, and scaling our dataset to match the capacities reported by the CEA, we find that India is likely to fall short of its capacity targets.

If the current completion trends continue, total installed capacity would fall short of the 777 GW target by around 56 GW for CE and 45 GW for RE. Similarly, for the 500 GW non-fossil target, the projected shortfall is around 77 GW. It is important to note that our analysis does not include new projects that may be announced after 2024. In that sense, our findings imply that meeting the 500 GW target would require announcing and completing 77 GW of projects within the next six years.

Explaining the capacity additions

We find that project characteristics play an important role in influencing implementation and completion timelines:

• Project size: Larger projects take longer to begin implementation and get completed.
• Ownership: Privately developed projects tend to be completed faster.
• Developer ranking: For RE projects, those developed by top firms (by market share) perform better.
• Location: RE projects in certain states such as Gujarat, Rajasthan and Andhra Pradesh complete faster than those in states with weaker RE ecosystems. Location is less important for CE projects.
• Year of announcement: RE projects announced after 2022 have longer implementation timelines compared to those announced before 2018.

These findings hold taking into account disruptions caused by the COVID-19 lockdown, which we explicitly model.

Finally, we compare completion timelines of large-scale solar and wind projects across states with benchmark timelines in the literature and find that even in RE-rich states, large projects face delays in commissioning.

Taken together, our findings suggest that the challenge is not just the announcement of new capacity but ensuring projects are implemented and completed on time. Bridging this gap will be critical to meeting India's future energy goals.

The authors are researchers at TrustBridge Rule of Law Foundation.

Comments on the Securities Market Code Bill, 2025

by Natasha Aggarwal, Pratik Datta, K. P. Krishnan, Bhavin Patel, M. S. Sahoo, Renuka Sane, Ajay Shah and Bhargavi Zaveri-Shah.

Finance is the brain of the economy. It dictates allocative efficiency. The financial system chooses which industries and firms receive capital. This efficiency determines the extent to which investment translates into GDP growth. Getting finance right is critical. The prioritisation of financial reform must be absolute.

The Securities Market Code Bill, 2025 (SMC) marks a substantial advance over the existing Securities and Exchange Board of India Act, 1992, particularly in strengthening governance arrangements and formalising the processes of regulation-making. Importantly, it makes a serious attempt to end the ''circular raj'' by confining the issuance of subsidiary instruments to the Chairperson or senior members of the Board, rather than dispersed internal authorities. Further, it has introduced timelines for investigations and attempted to separate the investigation function from the adjudication function, making the first effort towards a clearer separation of powers. That said, the SMC can make further strides if it focuses on the issues described below.

We now address the issues in relation to specific provisions drafted within the current SMC.

Separation of powers

The SMC raises three related concerns, which demonstrate a concentration of powers at SEBI.

Issue 1: Excessive delegation of essential legislative functions

Clause 96 prescribes imprisonment, a fine, or both as penalties for market abuse (an offence defined under Clause 93). However, Clause 93 also grants the regulatory authority to define new offences within the 'market abuse' category, which would carry the same criminal sanctions. This raises concerns around excessive delegation: the identification of criminal offences is a core legislative function and cannot be delegated. Moreover, such excessive delegation is subject to being struck down in judicial review.

Issue 2: Regulation-making on adjudication

Clause 146(2)(j), read with Clause 17(4), permits SEBI to make regulations on the manner of conducting adjudication proceedings. This should not be done by SEBI itself. SEBI is the agent, and the Parliament is the principal. The Parliament must define the checks and balances on the coercive power of the agent. Otherwise, the agent always has incentives to appropriate more arbitrary power.

Issue 3: Ineffective separation of investigative and adjudicatory functions

Clauses 17 and 27 introduce limited separation of investigative and adjudicatory functions for specific matters. Investigation is an executive function, and adjudication is a quasi-judicial function. A conflation of these two functions in the same individual raises concerns about the separation of powers.

In summary, there is no clear separation of power between the three functions of the regulator. The same regulator is empowered to define the scope of violations and offences, investigate them, enforce them, adjudicate upon them, and impose sanctions for their violations, all under regulations of its own design. This combination blurs the distinction between legislative, executive, and adjudicatory functions and concentrates powers in the same persons.

Proposal:

Remove Clauses 17(4), 92(f), 93(g), and 146(2)(j) from the SMC. Implement strong structural separation between the investigative and adjudicatory functions. One way to do this is to create a distinct career track for adjudicatory officers as Administrative Law Officers (ALO). One SEBI board member should also be designated as an Administrative Law Member, who oversees the functions of ALOs. These officers should be solely responsible for adjudication and must have no involvement in investigative or quasi-legislative functions. Introduce extraordinary safeguards to mandate arm's length operation between investigation and adjudication.

Timelines for investigation and adjudication

Issue: Clauses 13, 16, and 27 introduce timelines for investigation and interim orders. However, provisos allow these timelines to be extended (Clause 27(4), proviso to Clause 13(2)). Additionally, the SMC specifies no timelines for the completion of adjudication proceedings. This allows investigations and adjudications to continue indefinitely, rendering the statutory limits ineffective.

Proposal: Remove the power to extend timelines for investigation. If extensions are retained, mandate the publication of written reasons, subject to mandatory review by the SEBI governing board. Introduce a strict statutory timeline for the conclusion of adjudicatory proceedings. These timelines should be part of the Parliament-specified regulations on the manner of conducting adjudication proceedings that we recommend in our preceding suggestions.

Methodology for calculating unlawful gains

Issue: The SMC requires the determination of unlawful gains by an investigating officer under Clause 13(3), but provides no calculation methodology. This virtually guarantees arbitrary and inconsistent determinations. It defeats the rule of law.

Proposal: Codify standard methods or guidelines for calculating unlawful gains within the SMC. Operationalise these through detailed regulations. Reference the Competition Commission of India (Determination of Monetary Penalty) Guidelines, 2024, as a baseline.

Sanction determination factors

Issue: The SMC lists factors for adjudicating officers to consider while imposing sanctions. Some mirror Section 15J of the SEBI Act, which are unimplementable in practice. Terms like 'impact of the default or contravention on the integrity of the securities markets' (Clause 19(b)(v)) lack precision and invite arbitrariness.

Proposal: Base sanctions strictly on the quantifiable extent of harm caused to specific persons. Codify this methodology. Alternatively, publish binding guidelines detailing specific aggravating and mitigating factors, expanding upon the approach in the SEBI (Settlement Proceedings) Regulations 2018.

Criminal enforcement

Issue: The SMC retains criminal liability, including imprisonment, for some offences. Establishing guilt in Indian criminal law requires proof beyond a reasonable doubt, typically coupled with the requirement to establish intention. This is an inefficient tool for complex financial markets. The boundary between aggressive trading and market manipulation is thin. The threat of criminal sanctions deters contrarian strategies. This reduces market liquidity and harms price discovery. Traditional fraud is adequately covered by the Bharatiya Nyaya Sanhita.

Proposal: Remove all criminal liabilities. Structure sanctions as punitive civil penalties or restorative remedies, scaling to a multiple of the illicit gains. Retain debarment for systemic misconduct.

Power to issue directions

Issue: Clause 23 vests SEBI with open-ended direction-making powers. Moreover, the requirement to record reasons in writing (currently included in Section 11(4) of the SEBI Act) has not been included in Clause 23.

Proposal: Delete Clause 23. Confine non-penal measures to specific, narrowly defined statutory triggers (e.g., immediate asset freezing powers under strict procedural safeguards). All adjudicatory actions must be justified by reasons in writing.

Nominee directors on the SEBI board

Issue: The SMC retains government nominee directors on the SEBI board. Nominee directors prioritise the perspective of their parent departments over market efficiency. They exercise disproportionate influence. Inter-agency coordination should not occur via board representation.

Proposal: Appoint mid-career professionals for fixed terms until a mandatory retirement age. Bind them statutorily to SEBI's specific objectives. Address inter-agency concerns externally through the Financial Stability and Development Council (FSDC).

Commodities markets

Issue: Clause 49 empowers the government to determine commodities eligible for trading. The market must decide which commodities warrant hedging instruments. State determination of eligible commodities is equivalent to the government deciding which firm is permitted to issue equity.

Proposal: Delete Clause 49. Empower SEBI to draft regulations defining objective eligibility criteria for commodity derivatives, identical to the framework for eligible scrips.

Ombudsperson

Issue: Clause 73 empowers SEBI to designate an Ombudsperson. This creates a conflict of interest. The SMC lacks an appeals mechanism for decisions made by the Ombudsperson.

Proposal: Mandate statutory independence for the Ombudsperson. Ensure job security separate from SEBI management. Define a clear appellate process.

Exemptions for PSUs

Issue: Clause 65(2) empowers the Central Government to exempt listed public sector companies from listing and disclosure requirements. This violates Article 14 of the Constitution. State-owned enterprises must face the identical market discipline applied to private enterprises.

Proposal: Delete Clause 65(2). Mandate equal treatment for all market participants.

References

Natasha Aggarwal and others, "'Balancing Power and Accountability: An Evaluation of SEBI's Adjudication of Insider Trading'" (Working Papers, TrustBridge Rule of Law Foundation, 2025).

In Re: The Delhi Laws Act, 1912 (AIR 1951 SC 332).

M S Sahoo and V Anantha Nageswaran, 'Regulatory architecture 2.0: Securities Markets Code marks a decisive shift' (Business Standard, 25 December 2025).

M.S. Sahoo and Sumit Agrawal, "Reimagining SEBI's Consent Settlement Framework" (Chartered Secretary, January 2026).

C.K. Takwani, Lectures on Administrative Law (7th edition, 2023) at page 100.

Bhargavi Zaveri-Shah, 'SEBI does not need unlimited powers – here's what's wrong with the Securities Markets Code' (ThePrint, 5 January 2026).

Bhargavi Zaveri-Shah and Harsh Vardhan, 'Ghost of the Commodities Controller—why India's new financial law feels like the 1970s' (ThePrint, 19 January 2026).

Gains from messy regulatory footprints

by Amrita Agarwal and Ajay Shah. 

The traditional view

Regulatory architecture is the design of regulatory agencies as a block diagram with a box for each agency, a clear problem statement for each agency, and a set of definitions about how the agencies interact. In the analysis of regulatory architecture in India, we generally think there should be full clarity on the regulatory perimeter (what activities are regulated) and on the state agency that is vested with the relevant regulatory power (who regulates what). It is believed that regulatory arbitrage is a bad thing. Firms should not be able to choose the regulator that they prefer, and firms should not be able to opt out of regulation by going to the edges of a poorly defined regulatory perimeter. 

Consider the long journey to the Gold ETF (documented in Box 9.4 of Mistry, 2007). The Gold ETF was delayed by 5 years because all of the RBI, SEBI and FMC claimed jurisdiction over it. Reformers have long argued that regulatory architecture changes are required so as to eliminate such regulatory logjams. 

In the conventional Indian discourse, a clean block diagram has been prized (Roy et. al. 2019). It is felt that there should be a simple diagram and then everyone knows where they stand. The firms then organise themselves to go to the right state agency and civil servants do not waste time fighting turf battles. State power is unambiguously defined, for any aspect of the coercive power of the state, private firms have clarity on who wields that power, private firms have no agency on these questions, there is no regulatory arbitrage. For the field of finance, FSLRC offered such a clean block diagram (FSLRC, 2013). 

In this article, we explore limitations of this approach.

Dispersion of power

In the field of political science, the essential idea is that of dispersion of power, of checks and balances. The state performs better when power is contestable, when we `pit interest against interest' (Madison, 1788). Pure power becomes tyranny; checks and balances are the path to state capability. 

This is the motivation for separation of powers (split the state vertically between the legislative, executive and judicial branches) and federalism (split the state between union, state government and city government). These give dispersion of power. 

The checks and balances, the conflicts between these multiple elements of the state, is messy. But we get better outcomes out of this untidy mess than we would with concentration of power (and the associated clarity of who is in charge). 

There is an interesting analogy in urban planning. Jane Jacobs (1961) and James C. Scott (1998) have emphasised that a highly legible, master-planned city is rarely a thriving one. A good city is teeming with a million kinds of thoughts and actions. It is a great city, but it's not easily understood. By pursuing simplicity of control and the ease of achieving state legibility (Scott, 1998) and state control, we don't get to a good society. Ultimately, we are after a great society, not a powerful state. 

Three kinds of reasons favour epistemic pluralism in state building:

1. The world is complicated, and nobody knows what the correct state intervention is (Hayek, 1945). In this case, clearly handing over all the power to one state agency is less effective. It is better to have multiple different approaches by multiple agencies, which would yield more experimentation and diversity in the society. When one agency is doing something wrong, private persons benefit from having agency on going to another. Multiple agencies doing diverse things creates more knowledge as compared with one agency doing one thing.
2. Public choice theory shows us a causal pathway from greater power to reduced performance. When state personnel command more absolute power, there is a greater chance of going down pathways that suit the interests of the state and not the interests of the people.
3. Sometimes, there may not be a one size fits all regulatory strategy. There may be gains from having different government organisations approach things in diverse ways.

We should see the problem of agencies and their footprint in a more heterodox way. Instead of full clarity that all the power of X nature is to be wielded by Y agency only, and that all private persons must stand in line without flexibility or choice, would it help to have a greater blurring of the lines where multiple agencies overlap, including a role for fully unregulated arrangements? This could create better checks and balances. 

If this approach is taken, there would be more experiments of alternative pathways to performing state functions and multiple government organisations would learn from these experiments. The people would be less controlled, they would have more choice on how to behave (Tiebout, 1956). This would generate better progress when compared with a monolithic approach.

Example: Hedge funds

The government believes it adds value by doing consumer protection for mutual funds. One could think of a single government regulatory system doing consumer protection that applies to all funds. But we don’t have to think like that. By the time a customer is bringing Rs.10M to a fund, there is no need for consumer protection. 

This gives the `hedge fund' idea: The regulations must carve out a distinct industry, hedge funds, where the customer is obliged to bring in over Rs.10M. In India, we see this with the SEBI 2012 AIF regulations. This industry requires contract enforcement and prudential regulation (promises should be upheld, lying is not okay), and extremely large hedge funds can raise concerns about systemic risk regulation. But there is no case for consumer protection for hedge funds, which reduces the burden of regulation. 

Once this is done, there will be competition in the eyes of some customers between the less regulated industry (hedge funds) vs. the more regulated industry (mutual funds). If regulation for consumer protection creates value, then all customers will be attracted to mutual funds. But if there are flaws in the regulation of mutual funds, the hedge fund industry will grow. The presence of less-regulated hedge funds is a constant counter-point to the consumer protection that’s sought to be done in mutual funds.

Example: Company law in the US

Companies in the US can register in any state while operating in others. This creates competition between the company laws across states. This gives companies the ability to shop for their preferred legal regime. The state of Delaware has done well in modifying its laws and agencies so as to be more attractive to companies for incorporation, mergers & acquisitions, and exit. Some other states like Wyoming have followed this example and innovated on other aspects to provide a distinctive regime to attract companies. 

This approach has created a rich tapestry of natural experiments which reveal the efficient frontier of how company law should work (Romano, 1993; Fisch, 2017). If there had been a single mechanism of company law for the full country, there would be less empirical learning.

Example: The US banking system

Banks in the USA have a choice between a National Charter, a State Charter and a State Non-Member status. They can switch between these when they so desire. A multi-state Bank may switch to a National Charter under the Office of the Comptroller of the Currency (OCC). An innovative local-oriented bank may choose a State charter under the state’s banking department and the Federal Reserve. The threat of banks switching also reshapes the incentives of each regulatory agency, where excesses of power will lead to flight of the regulated to a certain extent. This gives better flexibility and checks-and-balances when compared with a single national bank regulation system. 

These benefits come with difficulties. Multiple alternative regulatory authorities (SEC vs. CFTC, OCC vs. Fed vs. FDIC) were part of a race to the bottom that led up to the crisis of 2008. In that period, Washington Mutual and AIG chose the under-resourced Office of Thrift Supervision (OTS) as its regulator. In response to the 2008 crisis, the Office of Thrift Supervision (OTS) was dismantled as part of the Dodd Frank Act (Granza et al, 2024).

Example: Recent thinking in Argentina

Javier Milei has emphasised that regulators are often captured by the existing players. Regulators obtain coercive power under the excuse of addressing market failure, but often use these powers in ways that hinder competition, creating a cosy profitable and less innovative equilibrium. One difficult pathway to address this is deeper regulatory reforms (akin to the FSLRC concepts of improving checks and balances and curbing the arbitrary power of regulators). Another pathway, that is being attempted in Argentina, is to subject the incumbent regulator and industry to the competitive pressure of alternative regulatory regimes. 

Milei’s Minister of Deregulation, Federico Sturzenegger, has argued that economic reform needs to identify many points where a bureaucrat or a union has the power to say "No" and introduce an alternative pathway where the market can say "Yes" without them. 

Towards these objectives, in 2023, the Amendment to the Civil and Commercial Code (Decree 70/2023) enforced a strict ‘freedom of contract’ settlement via their currency of choice - US dollars, cryptocurrency or even commodities. This gives choice back to the people and removes the monopoly of the local central bank for controlling local transactions or introducing cross border capital controls.

Similarly, the Fondo de Cese Laboral (Employment Severance Fund, Decree 847/2024) gives employers the choice to replace the traditional lump-sum expensive and uncertain litigation prone severance regulatory framework with a pre-funded predictable payout. This creates an alternative mechanism that firms in agreement with their labour union can choose to adopt if they feel it is superior in their context. This is playing out on the ground with each firm and labour union making their choice. 

It is too early to tell whether Milei’s reforms will succeed in restoring high economic growth to Argentina. But they illustrate the ideas of the present article: When faced with a monolithic incumbent regime, there is value in creating ambiguity and flexibility about the regulatory perimeter and the power of each authority.

Example: Charter cities, Hong Kong and GIFT City

While nobody planned it this way, the fact that the British retained control of Hong Kong in 1949 created the possibility of forum shopping for private persons. If communist China did well in certain respects, individuals and firms could choose to locate in China. But if British style liberal democracy worked well in certain respects, individuals and firms could choose to locate in Hong Kong. 

In the event, we know that Hong Kong worked out much better than China, to the point where it became an embarrassment for the CCP. But in the years where Hong Kong was a genuine alternative (roughly 1949-2015), it gave private persons a choice: to be ruled by one kind of government or another. The presence of this alternative made a major positive impact on China’s trajectory. The removal of this alternative has had an adverse impact on China’s trajectory. 

Paul Romer has extended this idea into a more general possibility of establishing `Charter Cities’ where first world liberal democracies run enclaves in poor countries, and then individuals and firms get a choice about what kind of government they prefer. 

Potentially, GIFT City can evolve towards a more first world governance style, and then it would become a counterpoint to conventional Indian thinking on how financial law and regulation works. From this perspective, the role that has been given to incumbent regulators in the governance of GIFT City represents a limitation to the possibilities of GIFT City emerging as a competitive rival to mainstream Indian state mechanisms on financial economic policy. 

In each of these three settings -- Hong Kong vs. PRC, Charter Cities vs. developing country host, GIFT City vs. conventional Indian financial economic policy -- we see the gains from multiple choices being available to private persons as opposed to a simple monolithic state, where the people are crushed, where there is no possibility of forum shopping.

Epistemic pluralism as a consideration in agency architecture

Simplicity and clarity of a block diagram, a complete and unambiguous regulatory perimeter, the lack of turf battles: All these are appealing in the yearning of the state for more power. They fit well with a high-modernist desire for social engineering, to rearrange society in a way that increases state legibility and looks logical. But they come at the cost of epistemic pluralism. 

State personnel and agencies perform better when their power is lower, when there are greater checks and balances. The society works better when there is more freedom, when the people are placed under weaker state power, when the people have more choice. It is better to envision a world where the people have more of a say in who will regulate them and how. 

We fully recognise that this can be messy. Forum shopping can become a race to the bottom with private firms choosing the least burdensome regulation, creating incentives for government organisations to deregulate even when wise state action is required to address market failure. The messy arrangement will involve bigger payments to lawyers, and turf battles between government organisations. But we should simultaneously see the limitations of monolithic power. There is merit in careful choices that create some amount of a mess. 

Practitioners do not see this in a strategic way. It is typical for an exasperated private firm CEO to say "Just tell me who's my feudal lord, and I will figure out how best to optimise under that structure of state coercion". But public policy thinkers need to play at a different level. We need to ask: How can state power be organised in a way that gives greater possibilities for private persons to innovate and obtain economic growth?  

What we need is not a simple insistence on monolithic power. What we need is a sophisticated conversation on conditions under which we get a race to the top (more like Delaware) as opposed to a race to the bottom (more like the US Office for Thrift Supervision). 

It is easy to criticise the US financial system as a sequence of disasters from LTCM to Lehman. But it is also important to see that the US has the highest per capita GDP in the world. There is a connection between the freedoms of the United States -- which come with difficulties -- and the immense success of the United States. The same financial system that failed with crises from LTCM to Lehman is the financial system that innovated, invented most of modern finance, and funded innovators and risk-takers that made the United States what it is today.

 In India, we come from the other extreme: from the presumption of state power and low freedom. It would be useful to step back from the yearning for complete state power. A world with more checks and balances looks messier, but it is generally more conducive to a good society and economic success. 

Introducing greater ambiguity around the regulatory perimeter is an important third pathway for economic reform, in addition to the traditional twin engines of (a) Deregulation, of removing state interference on problems where there is no market failure and (b) Putting the cladding of checks-and-balances and the rule of law, upon state agencies that do wield coercive power. 

The field of regulation is far from figured out. On a global scale, regulators first came about less than 100 years ago in the United States. Here in India, it is only from the late 2000s that a conceptual understanding of regulators started emerging in the intellectual community. The world is complex, state capability is low, most state coercion in India is riddled with mistakes. A big journey lies ahead, both in India and elsewhere, to find the goldilocks zone, of addressing some market failure but avoiding the excesses of state power ranging from central planning (government control of products and processes) to corruption. One ingredient that we in India need to add to our regulatory philosophy is humility, the desire for epistemic pluralism.

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LRS TCS and Overseas Travel: A Policy Design Critique

by Anirudh Burman.

Transaction taxes introduce frictions in transactions. Sometimes these frictions are in the larger public interest, for example, the interests of protecting government revenue ex ante because of the difficulty of ex post tax collection. In other cases, transaction taxes operate primarily to constrain transactions and their costs outweigh their benefits. A useful test is whether the tax (a) solves a genuine enforcement or information problem relative to ex post assessment, (b) is broadly designed and relatively neutral across comparable transactions, and (c) has stable, predictable parameters so that individuals can plan and comply without disproportionate costs. In addition, withholding taxes can be levied when there is a clear problem with ex post collection. However, the design of such taxes must still be proportionate to the objective and should not create large, avoidable liquidity and compliance frictions.

This post argues that the Union Government's Tax Collection at Source (TCS) on outward remittances under the Liberalised Remittance Scheme (LRS) and on purchase of an overseas tour programme packages fails these tests. It introduces a large, transaction-specific friction on outward remittances under LRS and on the domestic purchase of overseas tour programme packages. It does so without a clear statement of objective or a stable instrument design.

Introduction: TCS on LRS and overseas travel

TCS on LRS and on overseas tour packages was first introduced in the 2020 Union budget and the Finance Act, 2020. The Finance Act, 2020 inserted section 206C(1G) into the Income Tax Act, 1961 ( See Finance Act 2020 amendment here). The legal architecture in section 206C(1G) has two components. One is tied to an authorised dealer who "receives an amount for remittance from a buyer...", who intends to remit money out of India under the LRS. The other is a receipt-trigger tied to a seller of an overseas tour programme package. The second trigger is not a "remittance", which is conceptually confusing, since the move is primarily aimed at taxing cross-border movement of capital: LRS, a scheme under the Foreign Exchange and Management Act, 2000, allows overseas remittances up to USD 250,000 per annum, and the first component introduces a TCS on this, whereas the second component imposes TCS on overseas tour packages, independent of LRS. The second component introduces frictions for domestic purchases routed through Indian sellers.

Since the 2020 Finance Act, the Union government has tweaked this provision multiple times, adjusting tax rates, thresholds and exemptions. This years Union budget proposes to rationalise these further, but leaves the basic architecture intact.

Brief chronology of events

The table below shows that the instrument has been repeatedly redesigned along: (i) rates/thresholds and (ii) scope/coverage/definitions. This makes compliance and planning difficult for affected transactions.

Title of document (1)	Type of instrument (2)	Date (3)	What Changed (4)	Provision in the regulatory instrument (5)	Change type (6)
Finance Act, 2020	Law	March 2020	(a) introduced TCS on LRS remittances above INR 7 lakh per financial year (general rate 5%) (b) set concessional TCS rate of 0.5% for education remittance financed by an education loan (c) introduced TCS at 5% on sale of an overseas tour programme package (no threshold in the section text) (d) created exemptions where buyer is Government/embassy etc., or where buyer deducts TDS on the amount (as specified in the provisos)	Income-tax Act, 1961: s.206C(1G)	Rate/ threshold; Scope/ definitions; Exemptions
Notification No. 20/2022 (S.O. 1432(E))	Notification	March 2022	(a) created exemption from TCS for an individual who is non-resident and visiting India	Income-tax Act, 1961: s.206C(1G) (Notification No. 20/2022)	Exemptions
Notification No. 99/2022 (S.O. 3878(E))	Notification	August 2022	(a) superseded previous notification and replaced the exemption category: TCS not applicable to a non-resident buyer who does not have a permanent establishment in India	Income-tax Act, 1961: s.206C(1G) (Notification No. 99/2022)	Exemptions
Finance Act, 2023	Law	February 2023	(a) continued TCS at 5% on LRS remittances for education and medical treatment in excess of INR 7 lakh (b) continued concessional TCS at 0.5% on education remittances financed by an education loan in excess of INR 7 lakh (c) proposed increasing TCS rates from 5% to 20% for other LRS purposes and purchase of overseas tour programme packages	Income-tax Act, 1961: s.206C(1G)	Rate/ threshold
Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023 (G.S.R. 369(E))	Regulation	May 2023	(a) removed exemption in FEMA Current Account Transactions Rules, bringing international credit card usage while outside India within Rule 5 (and therefore within LRS accounting), which can expand the practical ambit for TCS.	FEMA CAT Rules, 2000: Rules 5, 7	Scope/ definitions
Press Release (Ministry of Finance): Clarification regarding applicability of TCS to small Debit/Credit Transactions under LRS	Press Release	May 2023	(a) clarified that international debit/credit card payments by an individual up to INR 7 lakh per financial year are excluded from LRS limits and will not attract TCS	MoF Press Release	Scope/ definitions
Press Release (Ministry of Finance): Important changes w.r.t LRS and TCS (deferral and thresholds)	Press Release	June 2023	(a) superseded the 19 May 2023 clarification and postponed implementation of the 16 May 2023 FEMA amendment, keeping overseas international credit card spends outside LRS (and outside TCS) until further order (b) restored INR 7 lakh annual threshold for TCS across all LRS categories irrespective of purpose (c) specified post-threshold LRS TCS rates: 0.5% for education loan, 5% for education/medical, 20% for other purposes (d) specified overseas tour programme package TCS: 5% up to INR 7 lakh and 20% above, INR 7 lakh (e) deferred the increased TCS rates to October 1, 2023.	MoF Press Release: LRS/TCS	Implementation/ deferral; Rate/ threshold
CBDT Circular No. 10 of 2023 (Guidelines to remove difficulty in implementation of changes relating to TCS on LRS and overseas tour packages)	Circular	June 2023	(a) clarified that overseas international credit card spending is not treated as LRS for now, so no TCS on such spends till further order (b) clarified that the INR 7 lakh LRS threshold for TCS applies per remitter (not separately per purpose or per authorised dealer) (c) clarified category boundary for overseas tour programme package, standalone international air ticket or standalone hotel booking is not a "package" (package must include at least two specified components)	CBDT Circular 10/2023	Scope/ definitions
Circular No. 11 of 2023	Circular	July 2023	(a) no change to TCS rates/thresholds/categories/exemptions.	CBDT Circular 11/2023	Scope/ definitions
Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2023 (re-insertion of Rule 7)	Regulation	June 2023	(a) reinstated exemption in FEMA Current Account Transactions Rules, excluding overseas international credit card use from Rule 5 (and therefore from LRS accounting), reversing the 16 May 2023 omission	FEMA CAT Rules, 2000: Rule 7	Scope/ definitions
Finance Act, 2024	Law	February 2024	(a) Inserted a sixth proviso to s.206C(1G) governing TCS collection based on the pre-amendment position (as on 01-04-2023.	Income-tax Act, 1961: s.206C(1G) (sixth proviso)	Implementation/ deferral
Finance Act, 2025	Law	March 2025	TCS thresholds increased.	Income-tax Act, 1961: s.206C(1G) (threshold amendment)	Rate/ threshold
Finance Bill, 2026	Law	February 2026	(a) proposed reducing TCS rate for LRS remittances for education/medical treatment (above INR 10 lakh) from 5% to 2% (b) proposed reducing TCS on sale of overseas tour programme package to 2% and removing the threshold/slab so 2% applies irrespective of amount (c) retained 20% TCS rate for LRS purposes other than education/medical.	Finance Bill, 2026: s.206C(1G)	Rate/ threshold

Regulatory uncertainty

A predictable, stable regime is important for economic freedom. Economic freedom implies the ability to plan properly, and planning requires foreseeability and predictability. The table above discusses frequent regulatory changes to the LRS and overseas travel framework since 2020. The government has revised thresholds, exemptions, rates frequently, set different TCS rates for different categories of spends and revised them, exempted non-residents, included or excluded foreign credit and debit-card spends, clarified what purchasing an overseas tour package means, and so on.

This matters for economic freedom: individuals cannot reliably forecast the cost of lawful foreign transactions, intermediaries cannot standardise compliance processes, and the effective burden depends on the tax rate, on exclusions and exemptions, as well as whether refunds are timely.

TCS on LRS and overseas travel as a hindrance to economic freedom

LRS was introduced in 2004 as part of a broader liberalisation of Indian finance in 2004. Since then, the LRS limit has been increased gradually from USD 25,000 to USD 250,000. This liberalisation reduced frictions in the ability of Indians to transact abroad, purchase foreign goods and services, and contributed to India's global integration.

In 2020, the Finance Act introduced a friction of a 5 percent TCS, which it increased to 20 percent in 2023 for purposes other than education and medical expenses. The budget speeches of the Finance Minister in Parliament ( 2020-21 and 2023-24 ) do not provide any reasons for introducing this friction. TCS is collected at the time of transaction, regardless of eventual tax liability. TCS imposes a significant friction on such activity. By doing this, the TCS changes the set of choices individuals have by making certain specific uses and transactions costlier from the perspective of both compliance and financial liquidity. In addition, if refunds are delayed, the private cost is not 20%, it is the aggregated cost of the time value of money, the opportunity cost of having made other choices had this liquidity constraint not been imposed, as well as the friction and uncertainty of Indian tax compliance.

Finally, the effect of the TCS is distributional regressive. Individuals facing the highest liquidity constraints are hit the hardest (young professionals, small business owners, families with recurring expenses, etc.). While lower frictions for educational and medical purposes alleviate some of this, the remaining frictions impose invisible opportunity costs on many other types of potential activities.

Paying advance TCS on overseas travel

While the TCS on LRS taxes foreign remittances, the TCS on overseas travel taxes even domestic transactions.

It is important not to equate foreign remittances with domestic transactions. The state regulates cross-border outflows under FEMA and other regulations and has articulated some objectives for this (e.g., managing outflows, monitoring, national security), even if one disagrees with the choice of objective or the proportionality of the instrument. By contrast, domestic transactions already sit within a general indirect tax architecture (GST), whose design objective was precisely to subsume transaction taxes into a broad-based system.

The issue here is not whether cross-border remittances can ever be regulated or taxed, but whether a narrow, high-variance transaction friction outside the GST framework, where the tax is collected upfront regardless of eventual tax liability, represents a coherent and proportionate policy design.

CBDT Circular 10/2023, Question 8, states that "overseas tour program package" includes expenses for "travel" or "hotel stay" etc., and then clarifies that purchase of only an international travel ticket or only hotel accommodation "by in itself is not covered."

Though two of three conditions need to be fulfilled for this to be triggered, it effectively brings domestic payments within its ambit. If one buys an international flight ticket from a domestic airline or a domestic travel aggregator as part of an overseas tour, such domestic expenditure in INR will also be included within the threshold of the TCS. As drafted, this requirement seems to collect an advance tax on individuals spending within India's domestic economy for foreign travel, as well as any spends outside India. This is novel, as earlier prohibitions, even in the license-raj era focused on foreign transactions and remittances, not domestic consumption of goods and services for foreign travel. The use of tax-based frictions serves to reduce the average Indian individual's integration with the globalised economy. In addition, the continual changes discussed above also affect the predictability and forecasting of decisions within the domestic economy because domestic spends on foreign travel are also included within the ambit of TCS.

One possible defence of this TCS is that it is intended to reduce certain outflows, analogous to a Tobin-tax style tax on foreign exchange transactions. The analogy is limited. Tobin's proposal was to cushion exchange-rate fluctuations. It was also designed to disincentivise very short-term speculative round-tripping transactions through a small uniform charge on foreign exchange conversions. The TCS regime is significantly broader in coverage (household remittances and even a domestic purchase trigger for overseas tour packages) and has been set at rates (e.g., 20 percent for many categories) that are far from marginal.

The Finance Minister in her budget speech of 2026 has proposed to rationalise many of the tax rates under the TCS regime. The proposal to reduce TCS to 2 percent for certain categories moves the rate closer to the range conceptually associated with a low-rate transaction tax. The current budget proposal is welcome. However, the deeper concern is the instrument design: a transaction-specific levy that is collected upfront irrespective of final liability, without sectoral neutrality and predictability. A better course of action will be to only pursue those cross-border transactions where the Indian state has clearly articulated objectives in a neutral, low-friction, predictable manner. Absent this, the core concerns remain about the design, and the consequent inability for households to plan and execute their economic activities.

Anirudh Burman is a research at XKDR Forum.

Announcements

IIHS University

The IIHS (Institution Deemed to be) University is now accepting applications from interested candidates for the second batch of their Master’s programmes. The University offers a set of five transformative interdisciplinary programmes for the 2026-27 intake.

• Master of Science in Sustainability Science and Practice.
• Master of Science in Climate Change Science and Practice.
• Master of Science in Urban Economic and Infrastructure Development.
• Master of Arts in Urban Studies and Practice.
• Master of Arts in Human Development Policy and Practice.

The attached brochure gives an overview of the five programmes. Interested candidates can apply at www.iihs.ac.in; applications are open until 20 March 2026.

The University also offers a PhD in Urban Studies and Practice, applications for which will open on 13 March 2026.

As India undergoes the largest rural-to-urban transition in human history, urbanisation is fundamentally reshaping its economy, society, culture, and environment. Recognising this defining moment, the University is premised on the need to transform the current nature of urban education, one of the most important drivers for India’s national development and sustainable global futures.

Recent graduates and young professionals from any educational background are eligible to apply to any of the five Master’s programmes. For example, even bachelor’s degree holders in non-science subjects can apply to IIHS University’s Master of Science programmes.

For queries, you can write to admissions@iihs.ac.in or contact +91 99012 55788, 96325 20741 (10 am to 6 pm India Time, Monday to Friday). IIHS, Sadashivanagar Campus, Bengaluru 560 080, India and IIHS, Kengeri Campus, Bengaluru 560 060, India.

Author: Siddarth Raman

Siddarth Raman is a senior research lead at XKDR Forum.

On this blog:

• The MACT Litigation Overload: How India's Regulatory Trifecta Forces Cases into Court, 8 February 2026.
• High-Voltage Treatment for a Comatose Elephant, 28 December 2025.
• Establishing the baseline for the Kollam district court reform, 21 November 2025.
• Beyond Pendency: Counting Cases Correctly, 5 October 2025.
• Get them to the court on time: bumps in the road to justice, 12 June 2025.
• Who is litigating cheque bounce cases?, 5 June 2023.

The MACT Litigation Overload: How India's Regulatory Trifecta Forces Cases into Court

by Siddarth Raman and Maya Ramesh.

Indian courts are drowning in third-party motor accident claims. More than a million claims, worth over INR 80,000 crore await resolution. These disputes account for a tenth of all civil pendency. In this article, we argue that this explosion in litigation is a consequence of poor regulatory design. India's third-party motor insurance market operates under a unique set of rules that dismantle the foundational economics of insurance. Coverage is mandatory, insurers cannot select customers, premiums are fixed by the regulator, and liability for injury or death is uncapped. These rules distort incentives: they encourage claimants to pursue bigger awards through courts, while leaving insurers with only one strategy - delay. This behaviour is often narrated as a simple story of bad firms harming consumers, when it is the inevitable consequence of a certain arrangement of incentives. The system effectively guarantees that most accidents end up in litigation.

Insurance economics - A short introduction

Insurance operates on an elegant economic principle -individual risks aggregate across large populations to convert unpredictable events into manageable outcomes at the group level.

By pooling risks, insurers use the premiums of many to pay the claims of the few. Risk-based pricing is key: older people pay higher health insurance premiums than younger people, smokers pay more than non-smokers for life insurance, homeowners in flood or earthquake zones pay more for property insurance. In the UK, younger drivers pay higher premiums to get behind the wheel, compared to drivers over 30.

In most insurance transactions, the interests of the insurer and the policyholder align. When you buy health or comprehensive car insurance, your insurer wants to pay valid claims promptly to keep customers satisfied, build loyalty and ensure recurring revenue. This alignment breaks down in third-party (TP) liability. The insurer has no customer relationship to maintain with the victim, creating a financial incentive to minimize and delay payouts.

Unique distortions in the Indian market

The Indian regulatory framework distorts conventional TP insurance dynamics through three specific interventions:

1. Mandatory Purchase and Mandatory Offer: Section 146 of The Motor Vehicles Act (MVA) mandates that every vehicle owner buy third-party insurance. Section 32D of the Insurance Act, 1938 mandates that general insurers underwrite minimum percentages of motor TP business. IRDAI's 2015 regulations explicitly forbid insurers from refusing liability-only policies. This dual compulsion creates a captive market where neither buyer nor seller has meaningful choice.
2. Regulated, Non-Risk-Based Pricing: IRDAI sets the premium for this mandatory TP insurance. These premiums are based on vehicle categories and historical aggregate claims data. They do not factor in the individual driver's risk profile - their driving record, age, experience, location, or their history of insurance claims. A safe or good driver with no history of accidents pays the same TP premium as a high-risk driver for the same vehicle class who may have chalked up a record. This decouples price from individual risk, preventing insurers from charging premiums commensurate with perceived risk.
3. Uncapped Liability for Injury / Death: The MVA imposes unlimited liability on the insurer for death or bodily injury. The 2019 amendment has a mechanism to link premiums and liability (Section 147(2)). When notified, the Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022 schedule continues to specify base premiums for unlimited liability.

As of December 2025, the premium for a 1-year TP insurance for a 4 wheeler of less than 1000 cc is INR 2094. Prices were last raised in 2020. The industry faces persistently high claims ratios (claims paid out as a ratio of premiums collected). In 2023-24, the industry-wide incurred claims ratio for motor insurance reached 78%. For PSUs like New India Assurance, the net incurred claims ratio hit 108% in FY 2024-25, meaning they paid out more in claims than they collected in premiums. The problem isn't new. The industry was discussing similar problems a decade ago.

The litigation funnel

Parties negotiate liability compensation in specialized Motor Accidents Claims Tribunals (MACT). A 2019 amendment automatically converts police DARs into claim petitions. Bargaining now begins under the direct oversight of a court. Litigation is the default, institutionalised starting point.

Consider the incentives this structure creates for rational actors. Insurers are forced to accept uncapped liability at a fixed, non-risk-adjusted price. Any large claim, involving injury or death is riddled with subjectivity, making it impossible to anticipate the potential payout. While an objective formula has been proposed, the deviations and exceptions are many. These formulae usually involve compensation of potential future income. In a poor country, this may involve pedestrians and drivers whose income isn't reported formally.

From the perspective of an insurance firm, each policy brings with it the prospect of potentially unbounded losses. There is no upside to paying higher amounts or doing it quicker - the insurer has no relationship to forge or salvage, and there are no reputational costs to delays or denial, unlike in own damage insurance. The legal costs in this kind of bulk litigation that insurance firms go through are comparably trivial to an uncapped liability. This is evident in the data from the IIB Motor Annual Report 2019-20: while 93% of OD claims settle for under INR 50,000, TP payouts run into lakhs.

In this context -

• Challenging the quantum of compensation is standard practice. It offers a chance to reduce the payout on appeal.
• Delaying the payout allows them more float.
• Signalling intransigence prevents future claims from using past allowances as precedent.

Insurers are also expected to make an offer within 30 days of the DAR being filed. This rarely happens. Any offer without a claim request will act as the floor for future bargaining. It is game theory optimal to lowball, or not make an offer. Contesting the claim amount, or challenging the facts surrounding income or extent of disability is perceived as unnecessary adversarial obstruction. It is a rational response to managing uncapped, subjectively determined liabilities against inadequate, fixed premiums, especially when bargaining in public.

Claimants pursue a different calculus. Under the standards established in Sarla Verma vs DTC (2009) and National Insurance Co. Ltd. vs Pranay Sethi (2017), the judiciary interprets 'just compensation' liberally. Any discussion between claimant and insurance firm is also intermediated through lawyers from the get-go. Lawyers acting to maximise their client's outcome advise the client on the potential for higher awards through the MACT process, leveraging the subjective elements in compensation calculation and the pro-claimant judicial stance. Accepting an early, potentially lower, out-of-court offer is less rational than pursuing the claim through the tribunal. If the initial award seems insufficient, claimants are also incentivised to appeal for enhancement in the High Court.

Why cases take decades

On paper, the system has avenues for settlement. In practice, they are largely an illusion. The regulatory architecture systematically discourages private resolution and co-opts settlement into the formal court process.

The moment a police officer files a Detailed Accident Report (DAR), the MVA mandates that the MACT must treat it as a claim petition. The clock starts ticking, and the case is officially in the judicial system, often before the claimant has even hired a lawyer. Even if the parties wish to settle, an offer to the claimant must be made within 30 days of receiving information of the accident, and recorded with the tribunal.

While mechanisms like Lok Adalats settle many cases, they function as an adjunct to the courts, handling cases referred by the MACT. The resulting settlement becomes a binding award, stamped with judicial finality. The system doesn't prevent compromise, but it demands that compromise happens under its watch, contributing to the docket load and reinforcing the MACT as the inescapable center of the universe for accident claims.

The MACT isn't necessarily efficient at disposing these claims. Cases last over a year, and the MACT often struggles with just getting parties to court. Even when an award is passed - both insurers and claimants have reasons to challenge it. For insurers, every MACT award above their initial assessment is worth appealing. The potential reduction in payout, combined with years of additional float on unpaid claims, makes the appeal economically viable even with low success rates. For claimants, the judicial system's pro-welfare stance and the subjective nature of compensation calculations mean enhancement petitions often succeed. Their lawyers, working on contingency, have every reason to encourage appeals.

The result is that cases often take decades to complete. We get a rough dipstick by examining a random sample of three judgements in MACT appeals that were delivered in January 2025 in the Delhi High Court.

• Case 1 - MAC APPL. 314/2021 (10 years): 2015 Accident → 2025 HC Judgment.
• Case 2 - MAC. APP. 94/2020 (12 years): 2013 Accident → 2025 HC Judgment.
• Case 3 - MAC. APP. 139/2021 (11 years): 2014 Accident → 2025 HC Judgment.

Each of these took over a decade to resolve. These are not outliers. Data from Delhi, Kerala, and Odisha shows that High Court MACT appeal pendency runs at 25-30% of district court pendency - a staggering appeal rate that reflects both parties' incentives to keep fighting.

Global parallels: The logic of trade-offs

India's regulatory framework is a global anomaly. While mandatory TP insurance is common worldwide, no other major economy imposes the same rigid combination of constraints. Other systems balance the mandate to purchase with trade-offs in pricing or liability.

The UK and Singapore, like India, have uncapped liability for personal injury to ensure victims are fully compensated. However, they balance this enormous potential payout by allowing competitive, risk-based pricing. Insurers can charge a high-risk driver more than a safe one, using the price mechanism to manage their exposure. China takes the opposite approach. It has regulated pricing for its compulsory insurance (CTALI), but it balances this by imposing strict statutory caps on the insurer's liability for death, injury, and property damage. The insurer's risk is known and finite. Most other systems, like those in the US and Australia, also mix and match, but they consistently avoid the trifecta. They pair mandatory insurance with risk-based pricing and various liability caps through tort reform.

Country	Regulated Pricing	Uncapped Liability
India	✔	✔
UK	✖	✔
Singapore	✖	✔
China	✔	✖
USA	✖	✖
Australia	Varies	✖

India stands alone in forcing insurers to take on unknown risks (uncapped liability) for a fixed, non-risk-based price. Insurance firms have no competitive edge - they cannot differentiate on offering, on price, on customer selection or ability to underwrite. This leaves them with no lever except optimising operational costs, or resorting to delay and dispute, making litigation the inevitable outcome.

Conclusion

The million-plus pendency overwhelming India's MACTs isn't a bug - the system is working as designed. When regulation simultaneously mandates purchase, fixes prices without regard to risk, and imposes uncapped liability, it makes fighting every claim the most sensible financial strategy for insurers. Claimants, guided by lawyers who understand the rules, have every reason to push for higher awards. Both sides are responding to incentives.

More judges won't solve this. Neither will faster procedures, or better technology. These are bandages to a structural problem. The solution demands fundamental regulatory reform: keep compulsory purchase (Section 146), but free the other levers - allow insurers to price for risk, and replace the unlimited liability by a capped liability schedule linked to base premiums (Section 147(2)). These are difficult changes with second order effects - poor drivers can get priced out and the burden of large claims will shift from firms to individuals. They may require complementary policies like higher penetration of personal accident insurance, a large public fund for the uninsured, top-up options to increase the liability cap for commercial vehicle owners. The fix is conceptually straightforward; the transition is unlikely to be. A time-bound expert committee should draft the amendments and phase them in.

India needs more functional insurance markets, not more courts. Markets need release valves - one cannot fix every variable and expect the system to work. Until our policies reflect this understanding, the litigation assembly line will keep running. Processing human tragedy through a decade-long judicial machinery serves no one's interests - not the victims waiting for compensation, not the insurers bleeding money, not the courts drowning in cases. In this case, the road to this dysfunction was paved with the best social welfare intentions.

References

Department of Justice, Government of India. n.d. National Judicial Data Grid (District Courts).

Economic Times. 2024. “10.46 lakh motor accident claims worth Rs 80,455 crore pending nationwide: RTI.” May 26.

Wood, Zoe. 2024. “They quoted £7,000-£8,000’: young drivers face huge car insurance rises.” The Guardian, January 27.

Insurance Regulatory and Development Authority of India. 2021. Motor Insurance Handbook. Hyderabad: IRDAI.

Insurance Regulatory and Development Authority of India. 2015. IRDAI (Obligation of Insurer in respect of Motor Third Party Insurance Business) Regulations, 2015. Gazette notification.

Ministry of Road Transport and Highways. 2022. Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022. G.S.R. 394(E), May 25.

General Insurance Council. 2024. General Insurance Council Yearbook 2023-24. Mumbai: General Insurance Council.

The New India Assurance Company Limited. 2025. Annual Report 2024-25.

Saraswathy, M. 2013. “Third-party motor segment a burden on insurers.” Business Standard, September 14.

Mohapatra, Mugdha, Siddarth Raman, and Susan Thomas. 2025. “Get them to the court on time: bumps in the road to justice.” The Leap Blog, June 12.

Sarla Verma v. Delhi Transport Corporation. 2009. AIR 2009 SC 3104. Supreme Court of India.

National Insurance Co. Ltd. v. Pranay Sethi. 2017. AIR 2017 SC 5157. Supreme Court of India.

Rajesh Tyagi v. Jaibir Singh. 2009. Delhi High Court.

Insurance Information Bureau of India. 2020. IIB Motor Annual Report 2019-20.

Financial Times. 2021. “General insurance pricing practices.”.

Land Transport Authority. 2025. “Buying insurance.” OneMotoring.

LawinfoChina. 2022. “Compulsory Traffic Accident Liability Insurance (CTALI) Regulations.”.

National Association of Insurance Commissioners. 2024. Product Filing Handbook.

State Insurance Regulatory Authority. 2021. CTP Premium and Market Supervision: Review of the Risk Equalisation Mechanism (REM).

Siddarth Raman is senior research lead at XKDR Forum. Maya Ramesh is Counsel at Solaris Legal. The authors thank Shubho Roy, Ajay Shah and Susan Thomas for useful inputs and discussions.