Govt mulls policy on regulators

The central government is contemplating a new policy on regulatory authorities. The guidelines, based on inputs from existing regulators, are being drafted by the Planning Commission.

Likely to be ready by June, 2007, these guidelines will be placed before the Union Cabinet for approval.

The new policy will ensure a level-playing field for private and public players and encourage investment in sectors like energy.

In cases where tariff continues to be determined on the basis of costs and norms, the central regulatory commission for the sector will be allowed to adopt either a 'return on equity approach' or a 'return on capital approach', depending on whichever is in the interest of consumers.

The central authority will specify the percentage of electricity to be procured by licensees from non-conventional sources by taking into account the availability and its impact on retail tariffs.