Independent regulation essential for growth: CCI

IANS, December 29, 2012

The growth of the private sector in India post-1990 has enhanced the importance of independent sectoral regulators, the head of the Competition Commission of India (CCI) has said.

“Its (independent regulation) importance has been enhanced with the growing prominence of the private sector in the Indian economy,” said CCI chairman Ashok Chawla said at a seminar here this week on the impact of the political economy of regulation on investments and economic growth in India, organised by CUTS International and CUTS Institute for Regulation & Competition (CIRC).

“Independent regulation, shorn of government interference, has always been important in reconciling consumer and producer interests..also there is the need to avoid regulatory overlap and confusion given the emergence of large number of regulators in the country.” he added

The biennial CUTS and CIRC report ‘Competition and Regulation in India, 2011’ was also released on the occasion by Chawla.

The third in a series, the report takes a close look at regulation in the microfinance, retail, natural gas, real estate, road transport and telecom sectors.

Speaking of the power sector, Ashok Lavasa, additional secretary in the power ministry, said that there would be no need for a coal regulator, for instance, if one is able to break the monopoly of the country’s lone coal supplier.

Lavasa said that till the monopoly of coal supply (by state-run Coal India Ltd) is broken one would need a regulator to ensure there is no abuse of monopoly powers.

Lavasa also said that the Electricity Act, 2003 did authorise creation of regional regulators rather than state regulators, but it was not successful due to lack of political will.

On lack of studies in India regarding the impact of regulatory decisions on consumers and on the economy Pradeep S. Mehta, secretary general, CUTS International, suggested using tools such as Regulatory Impact Assessment (RIA), as has been suggested by the working group on Cross Cutting Issues – Business Regulatory Framework constituted by the Planning Commission.

Dhanendra Kumar, former chairman of CCI, said though competition is the best regulator, it still required somebody to regulate competition.

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