Bureaucrat Lobby Stymies Tariff Commission Plan

Sources say similar pressures had forced the Rao government to drop the move earlier after finance minister Manmohan Singh had made the same proposal in his maiden budget in 1991. On that occasion, Singh had argued this would ensure a more transparent institutional mechanism for fixing tariffs and domestic prices (and administered prices for public

utilities) in sectors where there might be need for protecting industry against foreign

competition.

The move to transfer more powers to the Insurance Regulatory Authority has also run aground with the insurance division maintaining that it was "still too early". The resistance within the ministry is despite the fact that the move has the full backing of the finance minister and senior bureaucrats.

 

The proposal currently doing the rounds in government on the tariff commission is being initiated by industry ministry. The ministry, which already has the Bureau of Industrial Costs and Prices under its aegis, is keen that the tariff commission be brought within its purview.

The common minimum programme of the United Front government had promised the formation of the commission by September. "An independent tariff commission will be appointed within three months to hear and determine tariff disputes as well as to recommend appropriate levels of tariffs for different products and different industries keeping in view the larger interests of the economy," the CMP had said.

However, a section of the ministry is now opposing the entire move on the grounds that this would become a forum for the protectionist lobby in the country. The finance ministry, which has pushed tariff reforms since 1991, is keen to press ahead further and achieve rates comparable to competing countries in Asia. As a result, a final decision on the tariff commission has been kept in abeyance for the moment.

Similarly, the insurance division is seeking to slow down the process of transfer of powers to the proposed Insurance Regulatory Authority.

The view being expressed is that the process should be gradual and the Sebi model should be adopted.

"It is being argued that since the transfer of regulatory powers to Sebi itself took so long, then why should there be a hurry to do so in the case of IRA," sources said.

At present the government has already notified the transfer of the functions of the office of Chief Controller of Insurance (in Insurance Division) to the IRA. But this administrative shift to the IRA is yet to take place.

It is only after this shift takes place that the IRA can proceed with the restructuring of the four insurance companies. The ministry is clear that these companies would have to be strengthened prior to liberalisation of the insurance sector.

Divestment panel peeved at core group

The Disinvestment Commission has charged the core group looking into the disinvestment process with non-cooperation, saying this "lackadaisical attitude" is "totally unwarranted".

Mr G V Ramakrishna, chairman of the disinvestment panel, told PTI that the core group has not yet referred a single PSU to the Commission, even after one month of its functioning, as spelt out in the terms and reference of the commission. The core group set up by the present uf government, comprises the finance, expenditure and other secretaries.