New Delhi: Finance Minister Pranab Mukherjee on Tuesday said the government is considering setting up regulators for the coal and other infrastructure sectors.
"Serious deliberations are underway for establishing a
regulator for the coal sector and similar thought is now being
given to other infrastructure sectors as well," he said at a
CII-organised 'South Asia Conclave on Enabling Regulation for
Investment in Infrastructure'.
Mukherjee hinted at more such independent regulators in
contrast to suggestions by industry body CII for a composite
regulator for the entire infrastructure sector.
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," he said.
Along with CII, South Asia Forum of Infrastructure
Regulation (SAFIR), a network of infrastructure regulators,
took the initiative to share experiences for the design and
structure of an appropriate regulatory architecture, which
would promote investment in infrastructure in South Asia.
Though Mukherjee supported separate regulators, he agreed
there was the need for a common vision at the regional level.
"Indeed, a coherent approach of infrastructure
development in the South Asian region is an urgent necessity
in the aftermath of the global financial crisis," he said.
"(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," Mukherjee said.
Independent regulators are evolving into an institutional
forum, that is able to provide an opportunity to various
stakeholders to engage in discussion and resolve disagreements
in an open and transparent manner, he 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," Mukherjee said.
It may be noted that the Telecom Regulatory Authority of
India was established in 1997, the Central Electricity
Regulatory Commission was set up in 1999 and today almost all
the states have State Electricity Regulatory Commissions.
The Petroleum and Natural Gas Regulatory Board and the
Airports Economic Regulatory Authority are also in place.
Citing infrastructural bottlenecks, Mukherjee said, "The
SAARC region takes higher time and cost to trade goods
compared to China and other countries of East and South East
Asia."
SAARC countries' policy makers have recognised inadequate
physical infrastructure as the major impediment to investment,
promotion, business and inter-regional trade, he said.
Mukherjee went on to add, "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."
Pinning hopes on tax reforms for boost in revenue,
Mukherjee said the introduction of Goods and Services Tax
(GST) in 2010-11 "is on track."
The proposed indirect tax structure, GST, scheduled to be
introduced in April 2010, will do way with most of the
indirect taxes like excise and service taxes at the Center and
also state level taxes like VAT and octroi.
Allaying concerns on the implication of large government
borrowings, the Finance Minister said the RBI has taken
several steps to improve liquidity in the market.
"There is no dearth of liquidity in the economy," he
said, adding, inflation is not a pressing concern as yet.
He said though the impact of some normal south-west
monsoon is yet to be felt, the agricultural economy may fare
better than the initial estimates of decline in food
production.
As per the advance estimates released in July, kharif
production this year was expected to be 2.69 per cent lower
than last year.
Bureau Report