Regulatory framework for core sector likely

Significant investments in the infrastructure sector, most of them coming from the private sector, would be required in order for the economy to grow at the targeted 8 per cent, Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

Given the special nature of the infrastructure sector, which required large investments and long gestation periods, a strong regulatory framework would have to be put in place to ensure that the interests of the producers and consumers were balanced as well as to see that interests of public and private producers were balanced, he added. The regulatory structure will have to be adequately independent of the government in order to function well.

"The Planning Commission will prepare a paper on the general framework of the regulatory structure," he said, while speaking at a session on 'India in the Global Matrix' at the JRD Tata Centenary celebration.

The general principals would be outlined in the paper, he said, adding that the plan body would also evaluate the existing regulatory structures in different sectors and suggest ways to strengthen them.

In sectors where the public sector dominated, the producer had preferential access to the government and the interests of consumers were often not adequately addressed. The consumer is generally served by ensuring adequate supply at competitive prices.

Also, in sectors where the public sector was the dominant player, new private players will need to be assured of an effective balance between their interest and that of the public sector.

"The regulator should not view private sector investment as undesirable when it competes with an existing public sector producer," Ahluwalia said.

On the prime minister's announcement of setting up of a committee on infrastructure, he said the Planning Commission would consult ministries and set milestones.

A quarterly monitoring report will then be submitted to the Prime Ministers Office. Such a system would help in resolving inter-ministerial problems which tend to crop up regularly, he said.

The mid-term appraisal of the Tenth Five Year Plan, which is likely to be completed by the end of December will also give the government priorities to focus on, in the next two years of the Plan. The focus areas and the mix of investment necessary would be enumerated in the mid-term appraisal, he said.

The mid-term appraisal could be used to set the course of policy in sectors directly under the control of the Centre. In case of areas not directly under control of the Centre, like urban services, the Commission will suggest changes, which could be used as models by state governments.

Ahluwalia also advised industry to take the initiative in educating their workers on the implications of globalisation.

"In the older days, aggressive trade unionism worked because it resulted in higher wages. Failing that, strikes and lockouts made companies sick and resulted in nationalisation, which was an even better option," he quipped.

However, the organised labour force needs to be exposed to the changes happening around them on account of technology, foreign investment and greater interaction with the world in general.