Working Papers

Working Paper 13 (2015):
The Net Neutrality Debate in the Indian Context, with a Pinch of Salt’
Archana G Gulati
The debate on the regulation of over the top services in India more or less coincides with global development on the issue. The regulations to ensure ‘net neutrality’ protect and maintain open, uninhibited access to legal online content without broadband service providers being allowed to block, degrade, or create fast/slow lanes to specific content. This paper analyses the Indian context and debate on net neutrality, which is characterized by some unique features and problems, leading to unique and apparently persuasive arguments.

Working Paper 12 (2015):
[Un]Ease of Doing Business in India – A Review of Major Pain Points and Possible Lessons
Honey Gupta, Tunisha Kapoor & Jitin Asudani
One of the more influential challenges that India is today contended with is the need to improve its business climate, both in letter and spirit. The bureaucratic overdrive to repair the situation is fuelled by the latest World Bank rankings on one hand and the urgent need to support the ambitious national slogan-‘Make in India’, on the other. The Doing Business 2015 rankings show India notably ‘uneasy’, at a depressing 142 out of 189 countries ranked, having actually slipped two ranks (140) from the previous year world order. Most of the entire business life cycle right from starting a business, running it and to exit is indeed bothered by inefficient and lengthy procedures, lack of information and weak accountability that makes it cumbersome and expensive to conduct business in India.

As India now wants to make some serious regulatory repair, it might be worthwhile to start fixing the last few indicators of doing business, first. A possible approach could be to concentrate on the most distressing indicators (those that are ranked beyond 150), and map these across comparable economies, say BRICS. As against targeting a particular rank for India, such an approach can help draw useful lessons and inform the policies on incremental steps taken by select countries overtime on the specific indicators. This paper focuses on the four worst indicators – enforcing contracts (186), Dealing with Construction Permits (184), Starting a Business (158) and Paying Taxes (156).

Working Paper 11 (2015):
Competition and Regulatory Issues in Coal Sector in India
Molshree Bhatnagar
A sound regulatory design achieves the right balance of ostensibly contradictory principles such as independence and accountability, transparency and commercial sensitivity, predictability and adaptability, cost-effectiveness and promptness, and it is for this reason that achieving it becomes critical, and yet challenging. In recent past, coal sector has been under wrath of the apex court of the country along with the competition watchdog for the disregard of fair and competitive practices in allocation and management of coal blocks. The previous government, in its attempt to render a better state of the sector, passed an ordinance to establish an independent coal regulator.

It is in this background that the paper attempts to highlight the competition and regulatory issues in the coal sector in India and how the current legislative provisions are serving as breeding grounds for future litigations.

Working Paper 10 (2014):
The State of Broadband in India: A Call for Regulatory Neutrality
Archana G Gulati
The Telecom Regulatory Authority of India has commenced a consultation process on the issue of what needs to be done to deliver broadband quickly. In spite of repeated consultations and recommendations relating to broadband and the launch in 2012 of an ambitious Universal Service Obligation Fund (USOF) sponsored project to put in place a national optic fibre network, India continues have a dismally inadequate supply of broadband services, especially in rural areas where it is practically negligible. The abnormally low ratio of wirelines to wireless connections is a major part of this problem. The number of wire lines in India are declining in spite of considerable support from the state towards wireline infrastructure which continues to be largely in the hands of the incumbents. A major part of this support flows from the USOF. This paper tries to examine the problem of poor broadband penetration in India specifically from the perspective of regulatory neutrality and postulates that rectifying regulation by bringing in a focus on competitive and technological neutrality is a major part of what needs to be done.

Working Paper 09 (2014):
Battle for Regulatory Supremacy: Ambiguity in the Definition of “Control” between SEBI and CCI
Cyril Shroff, Nisha Kaur Uberoi
The Indian regulatory regime is a complex system with multiple regulators actively implementing parallel regulatory practices. There are regulatory bodies established in various sectors ranging from the Securities and Exchange Board of India (“SEBI”), the Competition Commission of India (“CCI”), the Reserve Bank of India (“RBI”), Telecom Regulatory Authority of India(“TRAI”), the Insurance Regulatory and Development Authority(“IRDA”), the Central Electricity Regulatory Commission (“CERC”),etc. The overlapping jurisdictions of these regulators carry the risk of transactions being needlessly stalled due to the multiple (and in some cases, contradictory) regulatory requirements that need to be met to get a transaction approved. In light of the above, it is critical that the various parallel regulatory approval processes are aligned to ensure that the merger and acquisition (“M&A”) activity is not hindered due to lack of coordination between the various regulators or cumbersome procedural formalities. This working paper analyses the potential areas of overlap between the CCI and SEBI in reviewing transactions which require merger control approval as well as trigger open offer obligations.

Working Paper 08 (2013):
(In)competitive Regulatory Policies in the Road Transport Sector, India
Udai S Mehta, Neha Tomar
Indisputably, infrastructure plays a momentous role in advancing economic development. One may say the growth of infrastructure is directly proportional to economic development and vice versa. It is also understood that for the systemic development of any sector, compliance with competition policies is absolutely necessary. This paper focuses on the road sector of India. The paper brings out the current climate of the Indian road sector and puts forth suggestions to amend the same. The paper revolves around the inefficient regulatory policies which daunt competition and consequently impede the sector’s growth.

First, the main factors which negatively affect the sector’s growth have been enlisted. Second, an analysis of the issues and suggestions to rectify the same has been mentioned. The paper strongly advocates for an independent, statutory road transport regulator, where the main function of the regulator shall be ensuring a level playing field, ensure service coverage across regions and providing a mechanism for compensation for the discharge of universal service obligations and promote competition. The paper also advocates for reforms of State Transport Undertakings and tendering processes in the sector. Further, the study moots for the creation of a seamless market by reducing multiple checkpoints and harmonizing inter-state policies. The paper also stresses on the importance of dealing with issues pertaining cartels by the Competition Commission of India.

Working Paper 07 (2013):
Maneuvres for a Low-Carbon State in India: Identifying Agency, Authority and Accountability in Governance of Clean Energy Development
Ashwini K Swain
More recently, India has been claiming to undertake a transition to a low carbon electricity sector. This alleged transition comes as a response to a range of competing agendas and simultaneous constraints in energising development without compromising the climate. The transition is based on two strategies involving renewable energy development and the promotion of energy efficiency. India has been following a ‘market‐plus’ approach based on the narrative of co-benefits. Consequently, a set of new actors have emerged to implement these strategies and gain from it. These actors are not confined to lobbying and advising the national government in creation and implementation of rules; rather, they frequently become agents of change in that they substantively participate in and/or set their own rules related to clean energy development.

This paper identifies these agents of change and their authority and accountability within the clean energy governance structure. It aims to find out the level of influence exerted by these agents on India’s strategy and action on clean energy development and thus it’s capacity to reduce GHG emission. By focusing on the role of agency, authority and accountability in the governance of clean energy, this paper unpacks the neglected question of what forms of state capacity and political strategy are needed to low-carbon development within the Indian electricity sector.

Working Paper 06 (2013):
Infrastructure Investment: A Trillion Dollar Question
Arvind Kumar
Infrastructure deficit severely constrains growth and development. 12th Five Year Plan has envisaged an investment target of U.S. 1 trillion dollars to overcome India’s infrastructure deficit. This paper provides an analysis of existing sources of finance and cautions against excessive reliance on bank credit. India faces a substantial financing gap which needs to be bridged by domestic as well as foreign private sector investments. Predominant providers of infrastructure finance are public sector banks. Tapping new revenue streams and innovating with sources and structures for finance is vital.

The gigantic task of financing infrastructure investment during the 12th Plan would require a shift from the traditional mode of bank financing towards other modes. Investment policies and regulatory guidelines for insurance companies, pension funds, mutual funds, banks and other financial institutions need to be sufficiently flexible for these entities to choose an appropriate risk-return profile within fiduciary constraints. In facing the challenge of infrastructure financing, the problem is not of the inadequacy of financial savings but lack of financial intermediation capable of mobilising and channelling domestic financial savings into infrastructure in a manner that does not create risks associated with the traditional bank financing mode

Working Paper 05 (2013):
Why India Needs a Robust Competition Policy Framework?
Archana G Gulati
The urgent need for regulatory reforms and strengthening of our governance capabilities has been highlighted by recent events. Every-day newspapers carry reports about alleged ‘scams’ while their editorials bemoan the present policy ‘paralysis’ with its obvious negative impact on economic activity. One area where policy and regulation can have a tremendous positive impact is the institution of a comprehensive competition policy framework. The draft National Competition Policy (NCP) holds great promise to promote good governance leading us away from damaging effects of rent-seeking behaviour and towards the benefits of accountability, transparency, equity and rapid and inclusive economic growth. This article highlights the key provisions of the NCP and strives to demonstrate how the implementation of these stipulations, supported by National Competition Rules (NCR) can effectively transform the quality of our governance.

Working Paper 04 (2013):
Is There a Case for Essential Facilities Doctrine in India?
Jaivir Singh
Competition in the market is frequently defined as a process of rivalry with the objective of garnering higher market share or more profit. The outcome of a competitive process is expected to result in lower prices, higher output, better quality and innovation. Sometimes, the competitive process faces obstacles when a market player does not have access to certain facilities without which it cannot compete effectively. These are known as ‘essential facilities’. The duty to share is mandated by the essential facilities doctrine. This doctrine imposes on firms, that control an essential facility, ‘the obligation to make the facility available on non-discriminatory terms.’

Though EFD has been incorporated in the telecom, electricity and oil & gas sector, however, in the case of the issue of access to medicine, pharmaceutical sector, and networking goods, the guidelines are either not present or are inadequate. It is in this backdrop that this paper examines the viability and justification of invoking and implementing the essential facilities doctrine in India. The paper also outlines EFD in other jurisdictions and emphasis on the need for an advancing role of the competition regime to promote and effectuate the doctrine in India.

Working Paper 03 (2013):
Regulation in Infrastructure Development: The Role of Consumer Participation
Pradeep S Mehta & Udai S Mehta
India has an ancient history of consumer protection. Kautilya’s ‘Arthashastra’ which was published in 4th century BC, was the basic law of ancient India which postulated the need for consumer awareness and protection. Ideally, market dynamics should ensure that the interests of the consumer and the interest of the provider of goods or services are balanced. However, markets do not always function ideally and are often characterised by one or more elements of failure. Given that, the economic interests of powerfully organised producers and inadequately organised consumers often clash at the level of the industry, there is a case for regulators which not only takes into account views and interests of all stakeholders but ensure that consumers have the opportunity as well as capacity to voice their opinions regarding the conduct of regulation and supply of the services.

It is in this backdrop, the paper examines and elaborates the importance of consumer participation in infrastructure regulation through information exchange between regulators and consumers; consultation with consumers; and facilitating partnerships. Besides, the paper through examining the electricity reforms in India outlines the importance of having an independent regulator for each sector and demonstrates that consumer participation is limited not because of the absence of regulatory provisions but of the necessary information, human capital and training facilities and programmes.

Working Paper 02 (2013):
Public Road (Passenger) Transport Regulation in India
S Sriraman
Over the years, the road transport sector has emerged as a dominant mode of transport accounting for about five percent of India’s GDP. However, the road transport sector is beset with problems. Growth in the vehicular population above 10% per annum has outstripped the modest growth in the expansion of the road network leading to severe congestion on many stretches of National/State highways. Besides, high growth in motor vehicle population has inflicted negative externalities on the society in the form of rising pollution, road accidents and time loss in commuting due to congestion. Over the years the share of buses in the vehicle population has fallen from more than 11% to barely 1% as a result of growth in personalised motorised mode (two-wheelers and cars). Road transport being a State subject has led to complex and diverse regulations in terms of motor vehicle taxes, permit fees, passenger taxes etc. across the States making the interstate operation of buses problematic.

In this backdrop, the paper examines the elements of the existing policy and a regulatory framework that ought to be in place for public passenger bus transport. Besides, the paper outlines the international experience of regulation and deregulation to offer some lessons for India. The paper acknowledges that recent initiatives by both the central and state governments, like JNNURM and Bus Rapid Transit System, are innovative approaches to address the derelict state of urban bus passenger transport in India.

Working Paper 01 (2013):
Regulating Microfinance Institutions in India: Need for Reforms
Santadarshan Sadhu, Kenny Kline & Justin Oliver
The paper analyses the growth and development of Microfinance institutions (MFIs) in India. Currently, MFIs serve 31.4 million clients with an average loan size under ₹ 10,000 and ₹207.5bn loans outstanding. Yet, proper regulation had largely been missing for MFIs leading to abuse of the consumers. In this context, the paper examined the Micro Finance Institutions (Development and Regulation) Bill, 2012 from a consumer welfare perspective. The Bill aimed to make financial access easier for consumers and regulate abuse of dominance of MFIs. However, authors find, the Bill lacks an integrated regulatory approach including RBI and other relevant market players.