The Planning Commission will bring out a policy paper on the regulatory framework for the infrastructure sector by end of 2004, Deputy Chairman Montek Singh Ahluwalia said clearly indicating that ministries, as in the oil sector, should not double up as regulators.
"(Prime Minister) has asked the Planning Commission to prepare a paper indicating the regulatory structure for each area of the infrastructure sector. We hope that by the end of this calender year, we will be able to bring out the paper so that the recommendations can be considered during the Mid-term Plan review," he told reporters on sidelines of a SIAM function in New Delhi.
The paper, he said, would outline the parameters of regulation, regulatory issues and the structure of the regulatory framework.
Ahluwalia did not agree with the suggestion of having one regulator for all the infrastructure sectors saying "the world over we don't have such a system. There is a regulatory framework and then there are sectoral regulators."
The former finance secretary said he was looking at a framework in which the regulator protected the interests of public and private players. But he acknowledged a critical problem: there were cases when a ministry (like oil) was in a field as a player as well as a regulator. A more transparent and impartial mechanism was needed, he said.
"Clearly no ministry can double up as a regulator," he said.
He said the government would start monitoring progress in key infrastructure projects, including airports, power, telecommunications, roads and ports on a quarterly basis to make sure that targets were being met.
Prime Minister Manmohan Singh is chairing a high-level committee on infrastructure, and Planning Commission would function as the executive arm of this committee and even have the authority to tell different ministries to speed up.
Ahluwalia said since infrastructure is not like any other commodity, it requires a strong regulatory framework. The Planning Commission will come out with a paper defining the principles on which a regulator in each of the infrastructure area would function. The rules of the game would be determined through a consultative process for which the commission would set up consultative groups.
He said the basic principles governing the roles of the regulator would be providing a level playing field between the private sector and the public sector companies.
More importantly, the regulator would strike a balance between the interests of consumers and producers.
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