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A welcome
initiative
Economic Times, May 31, 2010
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The draft
infrastructure regulatory reform bill initiated by
the Planning Commission is broadly welcome,
seeking as it does separation of the funding of
the regulator from any parent ministry and direct
accountability to Parliament or the state
legislature in the case of a state-level
regulator.
What’s proposed is
an ‘overarching’ framework to address the
‘divergent mandates and practices’ prevalent in
various sectors like electricity, hydrocarbons,
ports and telecom. The plan is to shore up
transparency in regulatory and adjudicatory
processes, and thus boost efficiency and price
competitiveness in infrastructure.
However, the draft
has its share of glitches. For instance, the
provision that the selection committee for the
different regulatory bodies and appellate
tribunals consist basically of serving and retired
bureaucrats (Part II, section 4) makes no sense.
Selecting regulators from within the brotherhood,
would surely be atavistic. In any case, there are
already norms in place for, say, the member
energy, Planning Commission to chair the selection
panel for the downstream petroleum and natural gas
board, and we clearly do need more independent
experts and professionals in charge and in
deciding roles.
The stated
objective of the bill is to bring about the next
stage of development in infrastructure regulation
and oversight, which is unexceptionable. We
certainly do need regulatory reform, even as we
seek to step up private sector participation
across infrastructure sectors and gainfully
augment resources. The bill seeks appropriate
powers for sectoral regulators, including those
for amending ‘standard conditions of licences’ and
even their revocation (Part V, sec 30) if the
conditions so warrant. But in parallel, what ‘s
also required is extensive guidelines on operating
procedures, especially in sectors like oil and gas
where there is huge scope for damages in the
field.
Further , a greater
role for the institution of public hearings needs
to be explored; however, the provision in the bill
for heavy penalties of up to 10% of annual
turnover is in the right direction, with built-in
inflation indexing. Infrastructure regulation
stands to gain from the proposals.
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