We Can and We Should Do Anmohan Singh Deserves Our Heartiest Congratulations on Being Elected Mfor a Second Term, a Rare Performance
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Covering developments on policy responses, policy implementation and policy distortions on a quarterly basis. Comments are welcome. VolumePP 10,oo No. 2 licyWatchlicyWatch April-June, 2009 We Can and We Should Do anmohan Singh deserves our heartiest congratulations on being elected Mfor a second term, a rare performance. It is thus time for him to introspect and travel down the memory lane. On December 25, 2004 he wrote in this newspaper: “I do hope that in the New Year (2005) we can all work together to build a more equitable, competitive and humane India…This is a doable agenda provided we can set aside our ‘make-do’ attitude and adopt a ‘can do’ spirit”. We hope that I N S I D E T H I S I S S U E Singh’s second term can become Number Portability ................3 a Can-Do and Shall-Do period, and not just for one year. Pre-budget Consultations ....9 During the last four years, EAC Lowers Growth many hurdles came his way, Projection........................... 10 including the global economic downturn. With a more stable Energy Shortage ................ 13 coalition, progress for the Falling Standards in the country along the path of ‘August Houses’ ................ 14 inclusive growth will need more than stimulus packages and Tough Balancing Act .......... 19 some ‘out of the box’ and E-redressal........................ 22 determined thinking, like the Manjul Cartoons nuclear deal. Many ideas cannot be postponed or vital issues left hanging on a cliff. This will need clear signalling and include harvesting low-hanging fruits within the next 100 days. As Dr Singh and many others have said, we need to boost investment in the H I G H L I G H TS infra sector as a counter-cyclical measure. The malaise in the infra area in the recent past was aided by poor governance and pork barrel politics in spite of Dr In Rajas Raj Singh assuming command of the situation. Alas, the process became a stumbling Payal Malik .............................. 8 block, rather than a catalyst. This needs to be revisited. Bigger does not mean Better The recommendations for reform in infrastructure governance arising from the Kaushik Das ........................... 16 splendid work done by think tanks like the Planning Commission and NGOs have to make the journey from paper to the realm of implementation. For example, the Getting the Right People Planning Commission’s draft paper on ‘Approach to Regulation of Infrastructure’ Jamini Bhagwati .................... 17 and the draft Regulatory Reform Bill, a law for designing a uniform architecture for regulatory authorities. Editors Choice In 2004, the government had also promised that “competition, both domestic Whatever form they are in, and external, will be deepened across industry with professionally-run regulatory No Mercy for Cartels institutions in place to ensure that competition is free and fair”. Not many will Augustine Peter ..................... 21 agree that this goal has been achieved, though some very small steps forward have been taken. One of them is the adoption of a National Competition Policy, as recommended in the Planning Commission’s policy document: ‘Inclusive growth’, which highlights the role of private sector investment in bridging our infrastructure deficit. However, business regulatory framework is itself an entry barrier to new entrants. The World Bank has assigned India a rank of 122 among 181 nations in “The reformer has enemies in all those who profit by the old order and only lukewarm terms of the ‘ease of doing business’ in 2009. However, the government needs to defenders in all those who would profit by put legal reforms on the fast track and engage the judiciary actively. In sum, there the new.” Machiavelli in The Prince are many things that Dr Singh can do and should do. Published by Consumer Unity & Trust Society (CUTS), D-217, Bhaskar Marg, Bani Park, Jaipur 302 016, India Phone: 91.141.228 2821, Fax: 91.141.228 2485 Email: [email protected], Website: www.cuts-ccier.org Printed by: Jaipur Printers P. Ltd., M.I. Road, Jaipur 302 001, India. I N F R A S T R U C T U R E N E W S D I G E S T Ministry of Aviation feel that the and services provided at the 12 ports, TRANSPORT government has been unable to carry to prescribe and monitor performance To Do List out the process of restructuring and norms and standards for services and When it comes to Civil Aviation, strengthening the existing facilities provided by port authorities there are some issues that require institutions, so would it be feasible to and private operators and also to immediate attention of the new set up another body. (BL, 07.05.09) decide on disputes between port government. The first is the issue of authorities, private operators and ground handling – design a new Regulator Tightens Grip users of the facilities and services. ground handling policy or continue Aviation regulator, Directorate (Livemint.com, 26.06.09) for some more time with the current General of Civil Aviation (DGCA) Connecting Cities policy. The second important issue plans to make it mandatory for airlines The NHAI is working on a plan to will be considering what needs to be operating in the country to report the identify at least 50 cities it should done to the Rs 3,000 crore which Air time of arrivals and departures of their connect on a priority, based on India is seeking largely to meet its flights, and delays, if any. This data population and traffic volume. If working capital needs. will be collated to analyse the reasons for delayed flights at various airports. approved, this would be a departure In the past few months, DGCA has from the current system where the tightened ticket rules asking airlines authority divides the highway Times of India to reflect airfare details due to growing stretches under several phases of consumer complaints over differences National Highway Development in advertised fares and actual ones. Programme. But data collection alone may not help A ceiling of 1,000km has also been unless it is verified from air traffic set on an annuity basis where the controllers and through random government pays highway developers checks by DGCA. an annual sum over the concession period, while the developer finances (Livemint.com,15.05.09) and builds the highways. Government All-pervasive Body organisations prefer the toll model, All ports in the country, both where the developer derives revenues state-owned and private, will soon be through tolls. Private developers on governed by one tariff regulatory the other hand prefer the annuity body, Tariff Authority for Major Ports model. (Livemint.com, 11.06.09) (TAMP). The Union government is planning to give deterrent powers to COMMUNICATION Some more issues that await a TAMP, including penal and decision are: allowing foreign airlines enforcement rights by having a full- Bharti, MTN Reconnect to pick up a minority stake in domestic fledged TAMP Act, rather than just Bharti Airtel Ltd. and South airlines; deployment of additional be a part of the Major Port Trusts Act. Africa’s MTN Group have restarted manpower for the airline watchdog; Ports currently regulated by TAMP merger talks to create a US$20bn and the need for creation of airport function as trusts under the Major emerging markets telecom entity. The infrastructure; expediting the creation Port Trusts Act, 1963. There is a need potential deal, which seeks to tiptoe of a civil aviation policy. (BL, 12.05.09) for a powerful and all-pervasive around the emotional sensitivities that TAMP. The idea is to have a scuppered their merger talks last year, Supremo transparent tariff structure across will catapult the combine into the The Planning Commission’s ports with TAMP acting as a dispute league of top five telecom operators proposal to set up a super regulator settlement mechanism with more globally, with over 200 million in the infrastructure sector has not powers. (Livemint.com, 13.04.09) customers spread across 24 countries been appreciated by the concerned in Asia, Africa and the Middle East. It ministries. There are plans to set up a Sharpened Teeth would also be India’s biggest cross- supremo for all public-private The Union government’s plan to border deal. partnership (PPP) projects of give more teeth to a proposed Sunil Bharti Mittal, Chairman and highways, ports, airports and regulatory body that will replace the Managing Director of Bharti, said, railways. existing tariff regulator for its dozen “We see real power in the combination The supremo will oversee: ports is a step in the right direction. and we will work hard to unleash it for whether the users of infrastructure The new regulatory body will be all our shareholders”. Phuthuma facilities are being provided with the created through a separate, Nhleko, Chief Executive Officer of right level of services and level of user independent legislation. MTN, said, “rationale for this potential fees being levied. The National The new port authority would be transaction between MTN and Bharti Highways Authority of India (NHAI), a full-fledged regulator. It would have was highly compelling”. The Department of Shipping and the the powers to set rates for the facilities (BL, 25.05.09 & ET, 26.05.09) 2 / www.cuts-international.org April-June 2009 PolicyWatch I N F R A S T R U C T U R E N E W S D I G E S T Satellite Radio preventing ‘fly-by-night’ operators country has the lowest telecom tariffs The floodgates are set to open for from making profits by trading in the world. satellite radio services in the country spectrum.