State, political interference in regulation undesirable: CCI chief

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, Competition Commission chairman Ashok Chawla said Monday.

"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," Chawla said, while delivering the 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".

To 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."

Noting regulators have to be balanced, he also agreed that "maybe we are over-doing in terms of regulation".

Chawla 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, 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".