Friday, November 03, 2006

What should be the role of regulation, especially in infrastructure services?

Regulation should aim at removing barriers to competition and eliminating abuse of market power. In segments of infrastructure services that are amenable to competition, regulation should be light handed and tariff setting could be left to competitive markets. -- Planning Commission

Experts in the Yojana Bhavan, feel that the role of regulators in infrastructure is to ensure a fair play in the sector and to protect consumers. Economic regulation means ensuring effective functioning of competitive markets and where such markets are absent to mimic the outcome of competitive market to the extent possible. It also identifies and addresses subsidies and cross-subsidies in the pricing of infrastructure services.