Finance Minister Pranab Mukherjee on Tuesday said the government was considering setting up regulators for coal and other infrastructure sectors.
“Serious deliberations are under way for establishing a regulator for the coal sector and similar thought is now being given to other infrastructure sectors as well,” Mr. Mukherjee said at the “South Asia conclave on enabling regulation for investment in infrastructure,” organised by the Confederation of Indian Industry (CII) in partnership with the South Asia Forum of Infrastructure Regulation (SAFIR) and the Central Electricity Regulatory Commission (CERC).
The infrastructure sectors such as electricity, transport, roads, railways, ports and airports, telecommunications are natural monopolies and rules of perfect competition do not always apply, he said. “In India, we have a commendable record of setting up of independent regulatory authorities for the infrastructure sectors. Indeed, a coherent approach of infrastructure development in the South Asian region is an urgent necessity in the aftermath of the global financial crisis.
The government expects sectoral regulators to create ground-rules, which mimic conditions of competitive markets, so that resources are utilised optimally, user charges are fixed in a reasonable and rational manner,” Mr. Mukherjee said.
Independent regulators were evolving into an institutional forum, that was able to provide an opportunity to various stakeholders to engage in discussion and resolve disagreements in an open and transparent manner, Mr. Mukherjee said. “If done successfully, the institution of independent regulators will help not just finance ministers, but all ministers and lay a more secure and stable foundation for democratic functions,” he remarked.
Citing infrastructural bottlenecks, Mr. Mukherjee said the SAARC region took higher time and cost to trade goods compared to China and other countries of East and Southeast Asia.
“A time bound target of removing the significant infrastructure gaps in the region is, therefore, essential for making South Asia the new powerhouse of global economic activity,” he said.
‘The institution of independent regulators will lay a more secure and stable foundation for democratic functions’