NEWS – July 2008
- Two’s a crowd
Financial Express, Tuesday, July 01, 2008 - Narrowly focused spectrum policy
The Economic Times, Tuesday, July 01, 2008 - Fair play panel scans shipping rates
The Economic Times, Wednesday, July 02, 2008 - Cartels, corruption plague railway procurement
Business Standard, Wednesday, July 02, 2008 - Price hike cap on drug cos likely to be eased
The Economic Times, Thursday, July 03, 2008 - LPG dealers come under MRTPC lens
The Economic Times, Friday, July 04, 2008 - TRAI set to recommend tighter licensing for cable services
The Economic Times, Friday, July 04, 2008 - Govt may change bidding norms
The Economic Times, Sunday, July 06, 2008 - Competitive launches may not come under ‘predatory pricing’
Business Line, Monday, July 07, 2008 - Govt plans regulator for tea industry
The Financial Express, Tuesday, July 08, 2008 - Amnesty proposed for ‘whistle blowers’ in a cartel
The Hindu Business Line, Tuesday,July 08, 2008 - National biofuel policy may see light of day
The Financial Express, Wednesday,July 09, 2008 - Indian ceos happy with regulatory system
The Hindu, Thursday, July 10, 2008 - Kerala mulls curbs on retail majors
The Business Standard, Friday, July 11, 2008 - Oil regulator members revolt against chief
The Financial Express, Saturday, July 12, 2008 - Vodafone, idea told to have one rate for all
The Financial Express, Monday, July 14, 2008 - Competition Commission for revamp of labour laws
The Economic Times, July 14, 2008 - Indian industry lags in competitiveness
The Financial Express, Tuesday, July 15, 2008 - RBI comes down on unsolicited credit cards
The Hindu Business Line, Tuesday,July 15, 2008 - Cablewallahs to be licensed
The Financial Express, Wednesday,July 16, 2008 - North block to fast-track reform
Business Standard, Thursday, July 17, 2008 - India makes foray into Nepal’s power sector
The Hindu, Saturday, July 19, 2008 - PSU pharma cos may be kept out of price control for now
The Economic Times, Wednesday, July 23, 2008 - Excessive regulations restrict growth of micro-insurance: IAIS
The Financial Express, Thursday, July 24, 2008 - TataSky under MRTPC lens
NDTV Profit, Friday, July 25, 2008 - Power distribution reforms off for now
The Economic Times, Wednesday, July 30, 2008
TWO’S A CROWD
Financial Express, Tuesday, July 01, 2008
Be suspicious about extra regulation. That thumb rule would certainly seem to apply to the government’s bright idea of creating a National Biotechnology Regulatory Authority (NBRA). There’s already a regulator, the Genetic Engineering Approval Committee (GEAC). GEAC, which meets every month, and is a single-window clearance system for genetically modified products. Its track record has been good so far, especially after the Supreme Court intervened to reform its functioning. GEAC in fact is an unsung regulatory success—usually anti-GM activists hog all the headlines. The committee, post-court directives, has usually passed the test of both thoroughness and speed. GEAC has approved over 150 cotton hybrids and cotton hybrids are a success story.
Narrowly focused spectrum policy
The Economic Times, Tuesday, July 01, 2008
Economics, Lionel Robbins famously stated, is the study of the allocation of scarce resources among alternative ends. Mavens of mobile policy formulation could be forgiven for thinking that spectrum was the only scarce resource in the industry and that mobile phone operators were the only users of spectrum.
This is a consequence of a policy debate narrowly focused on optimising the allocation of spectrum within the mobile industry, without regard to patterns of use of other inputs and of the usage of spectrum by much larger users of spectrum outside the mobile industry.
Fair play panel scans shipping rates
The Economic Times, Wednesday, July 02, 2008
Having increased 90% in one year, ocean freight may finally come down, thanks to an intervention by the Competition Commission of India (CCI).
The regulator has asked the Indian shipping industry to desist from fixing rates and issuing advisories to members on freight rates. Though the CCI missive is advisory in nature, the Indian shipping consortium –– Karmoham Conference known as the India Pakistan Bangladesh Ceylon Conference (IPBCC) –– may fall in line.
Cartels, corruption plague railway procurement
Business Standard, Wednesday, July 02, 2008
Cartels, bid rigging and corruption plague Indian Railway’s procurement, which runs into thousands of crore every year, says a Competition Commission-sponsored study.
In 2006, as many as nine firms participated in a tender for procuring high speed cast steel bogies, of which seven quoted the same price of Rs 99,638 per bogies for less than 50 per cent of the requirement, the draft report prepared by The Energy Research Institute(TERI), which has been commissioned by CCI revealed. The tender did not include the clause against cartel formation.
Price hike cap on drug cos likely to be eased
The Economic Times, Thursday, July 03, 2008
There may be good news for the pharma industry, which has been facing price caps and fighting high input costs. The government is learnt to be considering liberalising the 10% mandatory cap on price hike for drugs outside the price control. At present, non-scheduled drugs or drugs which are outside the direct price control of the government accounts for about 75% of the Rs 33,000-crore drug retail market. According to existing drug pricing laws, companies cannot increase the price of their drugs beyond 10% within 12 months.
According to sources, the chemical ministry is looking at several ways to ensure the availability of essential drugs in the market, including modification of the 10% ceiling in view of the sharp rise in input cost and inflationary pressure.
LPG dealers come under MRTPC lens
The Economic Times, Friday, July 04, 2008
FAIR trade regulator Monopolies and Restrictive Trade Practices (MRTP) Commission on Thursday directed its investigating arm to probe into complaints that certain oil companies are instigating their LPG dealers to compel consumers seeking fresh connections to also purchase gas stoves from them. Globally, abuse of dominance in one segment of the industry to suppress competition in related sectors is regarded as an anti-competitive practice. One well known case involves Microsoft, which was alleged to have used its leadership position in the Windows operating system to reduce competition in other software applications.
The Commission has given 90 days for the Director General of Investigation and Registration (DGIR) to complete the investigation. PSU majors like Hindustan Petroleum, Indian Oil and Bharat Petroleum and their respective dealers HP gas, Indane and Bharat gas dominate the manufacture and distribution of refillable LPG cylinders.
TRAI set to recommend tighter licensing for cable services
The Economic Times, Friday, July 04, 2008
Telecom Regulatory Authority of India (TRAI) is all set to recommend a tighter licensing regime for cable services with separate registration process for both MSOs and cable operators.
ET has also learnt that the regulator is looking at setting up separate monitoring cells for cable TV services at district, state and central level. Besides, TRAI will also specify quality of service norms that will have to be mandatorily followed by all cable operators across the country. The regulator is of the view that these steps will help restructure the fragmented cable industry in the country and also improve the service quality.
Govt may change bidding norms
The Economic Times, Sunday, July 06, 2008
The government is likely to alter the model request for qualification (RFQ) norm that seeks to restrict the number of bidders for public-private partnership (PPP) projects to five in the bidding stage. This follows an objection from the competition regulator, Competition Commission of India (CCI) to the model RFQ document. According to CCI, the norms are biased towards infrastructure biggies such as GVK, GMR, Larsen & Toubro and in turn abuses the competition laws.
A senior CCI official said that as per the competition laws, there can’t be any restriction on the number of bidders unless the project has technical liability involved. “If a norm seeks to limit the number of bidders who are technically qualified and potential efficient participants in the bidding process, then it is abusing the competition laws,” said the official.
Competitive launches may not come under ‘predatory pricing’
Business Line, Monday, July 07, 2008
Companies bringing innovative products to the market at competitive prices would be able to do so without fears of indulging in ‘predatory pricing’ under the Competition Act.
The Competition Commission of India (CCI) has also proposed that the issue of predatory pricing will not be applicable to introductory offers, clearance sales, and stock disposal.
Predatory pricing — also known as destroyer pricing — refers to the practice where a firm sells a product at a very low price with the intention of driving competitors out of the market, or creating a barrier to the entry of potential new competitors.
Govt plans regulator for tea industry
The Financial Express, Tuesday, July 08, 2008
India could soon have a regulator for the tea industry to check the quality of the tea exported, minister of state for commerce Jairam Ramesh said on Monday.
Ramesh said quality control of Indian tea is becoming an issue in international markets.
“I entirely agree with the proposal that we need a regulatory framework. It does not mean a revival of the license-control raj,” Ramesh said, while addressing the 115 th annual general meeting of Calcutta Tea Traders Association.
Amnesty proposed for ‘whistle blowers’ in a cartel
The Hindu Business Line, Tuesday, July 08, 2008
In a bid to incentivise ‘whistle blowers’ in a cartel, the Competition Commission of India (CCI) has proposed 100 per cent amnesty for the company which approaches the authority first with vital information on cartelisation.
Sectors such as cement, steel, tyres, shipping, and aviation have come under scanner in the past over instances and allegations of cartelisation.
Such a leniency provision would help break cartels, while protecting the interests of the company as well as the consumer.
Mr Vinod Dhall, acting Chairman, CCI, told Business Line that “in our proposed draft regulation we have provided that if a company which is party to a cartel breaks away and comes clean with information, there would be a leniency provision for them”.
National biofuel policy may see light of day
The Financial Express, Wednesday, July 09, 2008
The second meeting of the GoM on bio-fuels would finalise the bio-fuel policy that would take up the issue of offering market price for heavy oil generating products. After the new bio-fuel policy gets the nod of the GoM and is in place, it would fix the minimum support price (MSP) for biofuel oil seeds for in case the market prices fall below the MSP.
The MSP would be fixed at a level that would provide adequate income to the cultivators and would be revisited periodically to ensure fair price for the farmers. The minimum purchase price for purchase of bio-diesel by oil marketing companies would be based on the prevailing prices of diesel. In case the price of diesel falls below the benchmark price of bio diesel, the government would compensate the oil marketing companies.
Indian ceos happy with regulatory system
The Hindu, Thursday, July 10, 2008
India is one of the top three nations globally, where the company’s chief executives believe the government is business friendly and are taking adequate steps to reduce regulatory burden on firms, a report says.
“It appears that only in India and China is there overall a balance of CEOs who believe their government is both business-friendly and reducing the regulatory burden,” PricewaterhouseCoopers Annual Global CEO Survey said. Around 34 per cent of corporate honchos in India believe that the government here, where their company is headquartered, is creating a business friendly environment and 20 per cent said the country has reduced the regulatory burden on corporations, the report said.
Kerala mulls curbs on retail majors
The Business Standard, Friday, July 11, 2008
In the face of growing protests against the entry of retail chain stores into the state, the Kerala government has said it would impose surcharge and additional taxes on retail outlets run by national and international majors. Announcing this in the Assembly today, Chief Minister VS Achuthanandan lambasted the Centre for its policies on retail chains. He said the state government or the local bodies currently had no powers to ban the entry of retail majors into the state as the Centre had repealed the law in this regard in 2001.
To combat the retail invasion, the government would bring in legislation for putting a check on the retail biggies’ foray into Kerala. The state government had, almost a year ago, said the same but the law is yet to be enacted, irking the traditional traders in the state.
Oil regulator members revolt against chief
The Financial Express, Saturday, July 12, 2008
In a piquant situation, virtually all the member of oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) have openly revolted against chairman L Mansingh, condemning his ‘autocratic’ functioning and demanded a say in framing of regulations.
Mansingh brushed aside the queries on the subject, saying ‘go and ask the members… No such thing has happened.’ Sudha Mahalingam, member (Distribution); YPC Dangay, member (Legal) and BS Negi, Member (Infrastructure) confronted Mansingh, who is already under the government scrutiny, at the Board’s meeting on Thursady, officials present in the meeting said on condition of anonymity.
Vodafone, idea told to have one rate for all
The Financial Express, Monday, July 14, 2008
In a pro-consumer move, the Telecom Regulatory Authority of India (Trai) has asked Vodafone Essar and Idea Cellular to remove the “discriminatory provision” in their STD tariff plan of Rs 1.30 per minute and extend it to all subscribers without any conditionality.
According to Trai officials, the two companies had slashed the STD tariff to Rs 1.30 per minute in May after the country’s largest mobile operator, Bharti Airtel, had announced a tariff cut to Rs 1.50 per minute. However, Vodafone and Idea had stated that in their case the tariff would be Rs 1.30 per minute provided subscribers sent them an SMS request to be put under the plan. In case an SMS was not sent the rate of Rs 2.40 per minute would be applicable.
Competition Commission for revamp of labour laws
The Economic Times, July 14, 2008
The country’s archaic labour laws might fail the test of the evolving competition regime. A study by the Competition Commission of India (CCI) has underscored the need to revamp the labour rules in the country to remove the operational difficulties for small industrial establishments, which suffer more.
While the competition law advocates a market-operated economy, the labour sector has suffered from several inflexibilities acting as entry barriers for small industrial bodies. The government, which finds it hard to push forward labour reforms, has left small industrial bodies suffer at the hands of lengthy adjudications.
Indian industry lags in competitiveness
The Financial Express, Tuesday, July 15, 2008
India, the world’s second-largest growing economy, fares poorly in industrial competitiveness and is way behind China, a United Nations Industrial Development Organisation report shows.
In an industrial development scoreboard prepared by the UNIDO, the country is ranked 41 in the list of 100 economies, while the top growing economy of the world—China—is placed at the 26th position in terms of competitiveness of their industries in a liberalising world.
Singapore tops the UNIDO list and is followed by Ireland, Switzerland, Japan, Belgium, Sweden, Finland, Germany, Korea, Taiwan Province of China, France, the US, Hong Kong, Austria, Slovenia in the top 15.
RBI comes down on unsolicited credit cards
The Hindu Business Line, Tuesday, July 15, 2008
If you receive an unsolicited credit card, you can now make your bank pay for the inconvenience caused to you. The bank issuing the card will not only have to pay a penalty to the Reserve Bank of India, but also offer monetary compensation to the customer.
The RBI on Thursday issued a circular, which lists out a series of dos and don’ts about the protocol that will have to be maintained in the case of credit cards. The circular says that if an unsolicited card is issued , activated and billed for without the consent of the customer, the card issuing bank will not only have to reverse the charges, but also pay a penalty amounting to twice the value of the charges reversed.
Cablewallahs to be licensed
The Financial Express, Wednesday, July 16, 2008
In a suo moto recommendation, telecom & broadcast regulator Trai on Tuesday said that the country’s highly fragmented cable TV industry should migrate to a licensing regime from the existing registration system, in view of the growing convergence and to facilitate growth of the sector.
The recommendations, which have been forwarded to the I&B ministry, has sought a separate licensing framework for local cable operators (LCOs) and multi-system operators (MSOs).
Trai has recommended an entry fee of Rs 10,000 for LCOs operating at the district level and Rs 1 lakh at the state level, both for a period of five years. At present, registration for a cable TV operator is valid for only one year, with a provision for annual renewal.
North block to fast-track reform
Business Standard, Thursday, July 17, 2008
Soon after the trust vote in Parliament on July 22, the finance ministry hopes to push through a series of non-legislative reforms, chief among them disinvestment of minority stakes in around 10 central public sector undertakings by listing them on the stock market. The ministry may also separately consider a further relaxation in external commercial borrowing norms for the current financial year, senior officials told Business Standard today.
Finance Minister P Chidambaram has asked officials in his ministry to draw up a reform agenda that can be pushed through in the days after the trust vote is cast in Parliament, the sources added. Against the background of strong jockeying for the votes of independent and small party MPs, the ministry is betting on the United Progressive Alliance to win the trust vote with the help of new allies like the Samajwadi Party.
India makes foray into Nepal’s power sector
The Hindu, Saturday, July 19, 2008
The Power Trading Corporation (PTC) and Australian company Snowy Mountain Corporation have initialled a Power Purchase Agreement (PPA) for the Asian Development Bank-promoted 750 MW West Seti Hydroelectric Power Project in Nepal.
While a private Nepal party will hold 10 per cent stake, ADB will have 15 per cent share, Snowy Mountain Corporation 25 per cent, a Chinese company 15 per cent, an equal stake by IL&FS and the rest by the Nepal government.
PSU pharma cos may be kept out of price control for now
The Economic Times, Wednesday, July 23, 2008
Public sector pharma companies may soon get a shot in the arm to revive themselves. The government is planning to exempt PSUs such as Indian Drug and Pharmaceuticals (IDPL), Bengal Chemicals and Hindustan Antibiotics (HAL) from the price control blanket for two to three years.
The government is considering the proposal to help PSUs tide over the increase in cost of raw materials and also secure the manpower already invested in these companies. PSUs manufacture only scheduled drugs (price controlled drugs) and supply to institutions at a pre-fixed price. Sources said the chemicals ministry is expected to sent the proposal to the law ministry for vetting.
Excessive regulations restrict growth of micro-insurance: IAIS
The Financial Express, Thursday, July 24, 2008
Pin pointing various deficiencies in the current regulatory structures laid to promote micro insurance products across the globe, principal administrator of International Association of Insurance Supervisors; Arup Chatterjee said that excessive regulatory micromanagement of micro-insurance reforms leads to a counter-productive interaction between the regulator and the regulated.
Addressing the second Asian conference on micro-insurance in Mumbai on Wednesday, he said, “Some areas of the financial sector have multiple regulators, while others that could pose systemic risks have none. Both situations, of unclear responsibility, and of no responsibility, are dangerous.”
TataSky under MRTPC lens
NDTV Profit, Friday, July 25, 2008
DTH operator TataSky, which has removed some channels from its basic package has come under the scanner of fair trade regulator MRTPC for ‘monopolisation of price and imposing unjustified cost on the subscribers’ after it issued notice to the company. Admitting a petition filed by a consumer organisation, the Monopolies and Restrictive Trade Practices Commission (MRTPC) today issued notice to TataSky directing it to file its reply.
In its petition, Voluntary Organisation in Interest of Consumer Education (VOICE) alleged that the Direct-to-Home (DTH) operator by misleading its consumers arbitrarily increased the price.
Power distribution reforms off for now
The Economic Times, Wednesday, July 30, 2008
In yet another setback to the distribution reforms in the power sector, the government’s Accelerated Power Development & Reforms Programme (APDRP) may fail to meet the deadline yet again. The APDRP scheme aims to reduce aggregate technical and commercial (AT&C) losses of utilities to 15% within five years.
Sharp inter-ministerial differences over extending budgetary support to state utilities has resulted in the government deferring a decision on the matter and constituting a group of ministers (GoM) to evolve a consensus.