The passage of the Public Examinations (Prevention of Unfair Means) Amendment Bill, 2026 and the debate surrounding the proposed amendments to the Foreign Contribution (Regulation) Act (FCRA) may appear unrelated. Yet together they illuminate a deeper transformation in India's regulatory state. The challenge before policymakers is no longer simply designing better laws, but determining whether legislation and compliance can substitute for institutional credibility.

Democratic governments are expected to respond decisively when public institutions lose credibility. In recent years, India's response to governance failures has increasingly taken the form of new legislation, enhanced penalties, expanded compliance requirements and stronger regulatory oversight. Such measures often emerge from legitimate concerns - protecting national security, preserving institutional integrity or preventing organised crime. Yet they also invite a broader public policy question: does regulation, by itself, restore public trust?

The question has acquired renewed significance following the nationwide student mobilisation that culminated in Parliament passing the Public Examinations Amendment Bill, 2026. Triggered by repeated examination irregularities and the cancellation of the NEET-UG examination for aspiring medical students, the protests evolved into one of the most significant youth-led movements witnessed in recent years. The demonstrations eventually led to the resignation of the Union Education Minister, the constitution of a government-appointed task force chaired by Nandan Nilekani, and a comprehensive legislative response to examination fraud.

The amended legislation introduced tougher penalties against organised paper leak networks, mandates time-bound investigations, empowers the Central Government to transfer investigations to central agencies, and provides for specialised mechanisms, including Fast-Track Courts, to prosecute organised examination fraud. These provisions undoubtedly strengthen the legal architecture governing public examinations.

Limits of Legislative Solutions

The legislation deserves recognition for responding to a genuine crisis. Public examinations constitute one of the principal mechanisms through which merit, opportunity and social mobility intersect within the Indian state. A compromised examination system does not merely affect recruitment; it weakens citizens' confidence in the fairness of public institutions.

Yet the protests also revealed something legislation alone cannot resolve. Students were demanding accountability, but they were equally demanding institutional trust. The crisis did not emerge because India lacked criminal provisions against fraud. It emerged because systems responsible for securing examinations failed to prevent organised malpractice.

Political scientist Francis Fukuyama argues that the legitimacy of modern states depends less upon the quantity of regulation they produce than upon state capacity, the ability to implement rules effectively, predictably and impartially. Laws undoubtedly deter misconduct. However, laws operate largely after institutional failure has occurred. Institutional capacity seeks to minimise the probability of failure itself. Paper leaks expose vulnerabilities in procurement systems, digital security, vendor accountability and administrative oversight. These are failures of institutional design as much as failures of criminal deterrence.

From institutional trust to governance by compliance

A similar logic underpins contemporary debates surrounding the proposed amendments to the FCRA (Foreign Currency Regulation Act). The Indian state possesses a legitimate sovereign interest in regulating foreign contributions into civil society organisations. Transparency in financial flows and protection against undue foreign influence are accepted objectives across constitutional democracies. However, the contemporary debate surrounding the FCRA has gradually shifted away from the legitimacy of regulation itself towards the manner in which regulatory authority is exercised.

Civil society organisations, legal scholars and policy analysts have questioned whether increasing administrative discretion, expanding compliance obligations and uncertainty surrounding registration and renewal processes may inadvertently narrow civic space if procedural safeguards remain inadequate. The issue, therefore, is the relationship between regulatory authority and procedural legitimacy.

Across multiple sectors, be it education, civil society, business regulation or public administration, governance increasingly relies upon certificates, registrations, digital verification systems and procedural compliance as instruments of accountability. But who verifies the credibility of the institutions that issue the certificates?

Transparency cannot simply be certified; it must itself be transparent. As sociologist Max Weber observed, bureaucracy derives legitimacy not merely from rules but from their rational, impartial and predictable application. When procedures multiply without corresponding improvements in institutional credibility, compliance risks becoming a substitute for trust rather than its foundation.

Security and Self-Correction

Scholars such as Douglass North have long argued that institutions are the "rules of the game" that shape incentives and public behaviour. Likewise, Pratap Bhanu Mehta has consistently maintained that democratic legitimacy rests on the credibility of institutions and their ability to command voluntary public trust. Public confidence is restored when citizens believe that institutions operate fairly, transparently and consistently, irrespective of who is being regulated.

India's security environment has undoubtedly become more complex. Cross-border terrorism, cyber operations and geopolitical competition require a vigilant state. Under such circumstances, regulatory vigilance cannot be dismissed. However, a mature democracy must also guard against the temptation to explain institutional failures primarily through external conspiracies while paying insufficient attention to domestic administrative weaknesses.

The recurring examination scandals were failures of governance. Likewise, concerns regarding foreign influence should not preclude critical examination of how regulatory institutions themselves function. Political theorist Albert O. Hirschman, in Exit, Voice and Loyalty, reminds us that resilient institutions improve when they remain receptive to criticism rather than interpreting every disagreement as disloyalty. Patriotism and institutional introspection are not competing ideals. A confident republic can simultaneously protect its sovereignty while remaining willing to reform its own institutions.

Recovering Policy Imagination

The most significant lesson lies in recovering policy imagination, the ability to redesign institutions rather than merely expand regulatory frameworks. During a policy discussion, a senior mentor posed a deceptively simple question: Why does public policy instinctively seek new infrastructure when existing assets remain underutilised?

Across India, public spaces like library blocks, community halls, and government structures lie dormant outside office hours. Globally, the OECD has extensively documented how the adaptive reuse of such public infrastructure into lifelong learning centres and vocational hubs can generate immense educational and social value without escalating public expenditure.

India has already demonstrated this imaginative capacity through its Digital Public Infrastructure. Platforms such as UPI, DigiLocker and Aadhaar succeeded not because they multiplied compliance obligations, but because they simplified interactions between citizens and the state while embedding transparency within institutional design. These initiatives illustrate that governance reforms can enhance accountability by reducing friction rather than increasing procedural complexity.

As India aspires to become a developed nation by 2047, the success of its governance architecture will depend not simply on the enactment of stronger legislation but on the cultivation of stronger institutions. 

The next phase of Indian governance should move beyond the binary of "more regulation" versus "less regulation". The more enduring challenge lies in designing a regulatory state that is transparent without being opaque, vigilant without being arbitrary, and accountable without becoming excessively procedural.

Ultimately, trust is neither legislated nor certified. It is earned through competent institutions, predictable procedures and a state that inspires confidence because it consistently demonstrates credibility.

(The author is a Research Fellow at the Society for Policy Studies. The views expressed are personal. He can be contacted at piyushchaudhary2125@gmail.com )