CII for regulatory framework for infrastructure

New Delhi, Feb 25: Industry body Confederation of Indian Industry (CII) today called for evolving a 'new regulatory architecture' for building India's infrastructure.

In a joint report with Public-Private Infrastructure Advisory Facility (PPIAF) on 'Recommended Framework to Improve Regulatory Effectiveness in Infrastructure Sectors', the chamber called for establishing an overarching regulatory framework for infrastructure.

It also recommended to set up the principles that would enhance and ensure the effectiveness of regulatory mechanism for infrastructure.

The report, presented to Planning Commission Deputy Chairman Montek Singh Ahluwalia, has suggested that these principles be given a legal framework for efficacy.

''Our expectation is that existing infrastructure regulatory bodies, and new ones being contemplated by the Central and State Governments, will seek to comply with these recommendations. We recommend that the principles for regulatory effectiveness be enshrined in a national-level Infrastructure Regulatory Framework Act,'' said CII National Council for Infrastructure Chairman Vinayak Chatterjee.

The recommendations draw upon an analysis of the major shortcomings in the regulation of telecommunications and power sectors, particularly in the areas of regulatory independence, authority, professionalism and accountability.

''The CII Report does not espouse the perspective that all infrastructure sectors must have an economic regulator irrespective of the sectors' market maturity or needs,'' said Mr Chatterjee.

The report calls for the need to focus on the seven pillars of infrastructure regulation -- regulatory autonomy, regulatory empowerment, regulatory accountability, transparency in regulatory functioning, jurisdictional clarity between the sector regulator and the Competition Commission of India, fair and efficient dispute resolution and building regulatory capacity.

Regulatory autonomy should focus on institutional, financial and operational autonomy. There is a need for selection of competent, qualified and eminent persons through a credible, open and impartial selection process. Whilst the government should retain the ultimate right to appoint the regulator, the selection process and mechanism should be institutionalised and made credible, it said.

The report calls for guaranteeing financial autonomy for the sector regulators by providing budgetary allocations which are based on their annual work plans and empowering them to charge/levy fees, etc, from sector participants to fund their activities.

It recommends that the sector regulators should be empowered to have jurisdiction to perform entry, price and performance regulation. To ensure regulatory accountability, the sector regulator should be accountable in relation to its functioning.

In capacity building, CII has also called for a National Institute for Regulation of Infrastructure at the national level under the stewardship of the Planning Commission, to aid all around capacity building in the regulatory function.

UNI