The panel has also recommended that the Securities and Exchange Board of India (Sebi) should evolve an 'exit mechanism' for employees, who are not able to meet the organisational expectations.
The suggestions were given by the Committee on Rationalisation of Financial Resources, an internal panel set up by Sebi to suggest ways for strengthening of its financials so that it can more effectively carry out its functions of market regulation and investor protection
The committee, whose report has been submitted to the Sebi's board and the recommendations are in the process of implementation, analysed the trend in Sebi's revenue and expenditure for the past five years.
It was found that the total income has increased marginally by about 7 per cent from Rs 315 crore in 2008-09 to Rs 338 crore in 2012-13, while expenditure in the same period jumped by 240 per cent from Rs 84 crore to Rs 201 crore.
Sebi's income from fees actually fell to Rs 149 crore in 2012-13, from Rs 195 crore in 2008-09, while establishment expenses accounted for more than 65 per cent on an average during these five years.
The panel further observed that this trend of increased establishment expenses would continue in the wake of Sebi planning to increase its staff strength from about 600 in 2012-13 to close to 1,000 by next fiscal.
Consequently, the committee has suggested an upward revision of various fees charged by Sebi from marketintermediaries, listed companies and other entities.
At the same time, the panel felt that the possibility of reducing expenditure costs was remote, given the significance of human resources in achieving Sebi's assigned regulatory mandate and the ever-increasing expectations from a regulator.
On the other hand, the committee suggested introduction of some "long-term benefit" for employees, which it said could have "demonstrative effect in retaining talent and also enhance the organisational belongingness".
It has favoured creating a superannuation fund to cater to the pension needs of employees, while estimating that about Rs 10 crore may be required for the same.
Sebi's expenses towards salaries and wages stood at Rs 133 crore in 2012-13, while the same is estimated to have increased to Rs 147 crore in 2013-14. It may rise further to about Rs 167 crore in the current fiscal and close to Rs 200 crore in the subsequent year, as per the regulator's budget estimates.
At the same time, the panel also said "there is a need to critically examine the expanding organisational requirements particularly with respect to the staff expectation so as to not only retain the trained manpower but to also attract new talent to fulfil Sebi's regulatory mandate".
The regulator's training and recruitment expenses rose sharply in the last fiscal to over Rs 5 crore and the same is expected to further rise to about Rs 8 crore after a modest dip in the current financial year, as per the current estimates.
The committee also emphasised that some internal benchmarks be evolved for evaluation of performance to identify good performers and create a suitable framework to reward them.
Besides, it suggested "a suitable exit mechanism" for employees who are not able to meet the organisational expectations to help Sebi not only keep attuned to ever-changing expectations and ensure cost rationalisation as well.
The panel also recommended a time-bound detailed study of the entire issue with regard to its staff-related proposals.