Continued interference by the state to protect vested interests is
undesirable and compromises efficiency of a regulator whose independence
requires a high degree of political and judicial maturity, Chairman of
the Competition Commission of India, Mr Ashok Chawla said at an ASSOCHAM
95th foundation day.
“Continued interference by the state compromises the efficiency enhancement role of the regulator. For an independent regulator to deliver, state actors have to forbear. Intervention to promote public policy or redistribution objectives is to some extent ' understandable'. However, interference to protect vested interests is ' undesirable”, Mr Chawla said delivering 95th ASSOCHAM Foundation Day Lecture here.
He said creation and sustenance of independent regulatory institutions requires a high degree of political and judicial maturity. “We are slowly moving in that direction. But it cannot happen in a day". On a question whether some of the regulators are going over-board, the CCI Chairman said, “I substantially agree...some of the new regulators with new found zeal tend to become policemen". He said the regulators have to be balanced. He also agreed that "maybe we are over-doing in terms of regulation".
He said the existing statutory and institutional framework suggests the absence of a common regulatory philosophy. "Perhaps there is a need for a helicopter view of the regulatory structure and an over-arching legislation which brings about uniformity in design and structure to the extent necessary....there are perhaps one too many, particularly in the financial sector".
Referring to the report of the committee he had chaired on allocation of natural resources before he took over as CCI chief, Mr Chawla said the findings of the committee were " clear and sharp; lack of transparency, administrative discretion; absence of proper price discovery of the resources resulting in rent seeking behaviour on the part of the beneficiaries".
However after unsavory events of the past few years in the allocation of natural resources like coal, transparency and clarity of the process is being injected. Auctions are set to become the norm in grant of many resources. “However, it would be desirable if these tentative attempts are carried to their logical conclusion...by converting executive orders into rules ....bringing them under Parliamentary over-sight..."
In his intervention during the question-answer session, leading industrialist and ASSOCHAM Past President and Chairman of DLF limited Mr K P Singh said, there should be a provision in the law to hold those regulators accountable who pass judgements on flimsy grounds and do immense damage to the reputation of the companies, and investors. These regulators pass judgements and then go while companies suffer loss of reputation. By the time the aggrieved companies get justice, damage is already done to their reputation.
Mr. Rana Kapoor President ASSOCHAM said, The Competition Commission of India has established its sound credentials and handled complex cases involving competition and monopoly with a fine balance of alacrity and maturity. I am confident that, under the leadership of Shri Ashok Chawla, CCI will continue to improve the transparency of the rules and business transactions through a prudential oversight mechanism, thereby creating a strong and stable regulatory and business environment which will be critical for revitalizing the economy and boosting investor confidence.
ASSOCHAM Past President Mr Anil Agarwal also agreed with Mr Singh that the regulators should also be made accountable. Others who also spoke during the conference was Mr. D S Rawat Secretary General ASSOCHAM.
“Continued interference by the state compromises the efficiency enhancement role of the regulator. For an independent regulator to deliver, state actors have to forbear. Intervention to promote public policy or redistribution objectives is to some extent ' understandable'. However, interference to protect vested interests is ' undesirable”, Mr Chawla said delivering 95th ASSOCHAM Foundation Day Lecture here.
He said creation and sustenance of independent regulatory institutions requires a high degree of political and judicial maturity. “We are slowly moving in that direction. But it cannot happen in a day". On a question whether some of the regulators are going over-board, the CCI Chairman said, “I substantially agree...some of the new regulators with new found zeal tend to become policemen". He said the regulators have to be balanced. He also agreed that "maybe we are over-doing in terms of regulation".
He said the existing statutory and institutional framework suggests the absence of a common regulatory philosophy. "Perhaps there is a need for a helicopter view of the regulatory structure and an over-arching legislation which brings about uniformity in design and structure to the extent necessary....there are perhaps one too many, particularly in the financial sector".
Referring to the report of the committee he had chaired on allocation of natural resources before he took over as CCI chief, Mr Chawla said the findings of the committee were " clear and sharp; lack of transparency, administrative discretion; absence of proper price discovery of the resources resulting in rent seeking behaviour on the part of the beneficiaries".
However after unsavory events of the past few years in the allocation of natural resources like coal, transparency and clarity of the process is being injected. Auctions are set to become the norm in grant of many resources. “However, it would be desirable if these tentative attempts are carried to their logical conclusion...by converting executive orders into rules ....bringing them under Parliamentary over-sight..."
In his intervention during the question-answer session, leading industrialist and ASSOCHAM Past President and Chairman of DLF limited Mr K P Singh said, there should be a provision in the law to hold those regulators accountable who pass judgements on flimsy grounds and do immense damage to the reputation of the companies, and investors. These regulators pass judgements and then go while companies suffer loss of reputation. By the time the aggrieved companies get justice, damage is already done to their reputation.
Mr. Rana Kapoor President ASSOCHAM said, The Competition Commission of India has established its sound credentials and handled complex cases involving competition and monopoly with a fine balance of alacrity and maturity. I am confident that, under the leadership of Shri Ashok Chawla, CCI will continue to improve the transparency of the rules and business transactions through a prudential oversight mechanism, thereby creating a strong and stable regulatory and business environment which will be critical for revitalizing the economy and boosting investor confidence.
ASSOCHAM Past President Mr Anil Agarwal also agreed with Mr Singh that the regulators should also be made accountable. Others who also spoke during the conference was Mr. D S Rawat Secretary General ASSOCHAM.
