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Restrict
monopoly in financial markets, says Rangarajan
The Financial Express,
October 17, 2007
Mumbai, Oct 16 Chairman of
the Prime Minister’s economic advisory council C
Rangarajan has said the tendency of natural monopolies
in the financial markets must be restricted. “Natural
monopolies are a threat,” Rangarajan said, added
creating a creative competitive atmosphere in the
financial markets would spur growth.
Talking to FE on the
sidelines of a panel discussion on “The political
economy of regulation in India” in Mumbai on Tuesday,
Rangarajan strongly favoured the existence of various
regulators in the country by saying that every regulator
has its own importance. Also, he maintained that UK
model of having a singular regulator for all the sectors
could not be viable for country like India.
“Sectoral regulators are
required to facilitate a healthy competition in the
market,” he said, and for this basic competitive
atmosphere to prevail in the market an effective
regulator was essential. “We need a separate public body
which would support a healthy competition,” he said,
while arguing that India needed to maintain a
market-structured competition. However, he made it clear
that the regulatory set-up must be transparent and
competent too.
He also talked of
establishing a relationship between sectoral regulator
and competition.
The panel discussion set
the stage for the release of a report by CUTS titled,
“Competition & Regulation in India, 2007,” by Rangarajan.
The report takes stock of how the country has moved
forward in promoting growth and equity through
regulatory reforms and better management, and what still
needs to be done.
RBI deputy governor Rakesh
Mohan said on the occasion that there ought to be a
commonality in approach by various regulators
functioning in the country. “You need to have a rigid
approach to see how do the regulators function,” he
added.
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