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Policy News
Volume 2, Issue 2, February 2010
Indicus Analytics, An Economics Research Firm


Deemed university row exposes flaws in

monitoring system
Recent row over deemed universities has exposed the
inability of the government to put in place an effective
monitoring mechanism to review the performance of
these institutions.

The Indian Higher Education system is crumbling.

In an effort to increase access to higher education
shortsighted measures like giving dodgy
institutions the status of deemed university were
adopted by the UGC. Until we establish good
quality higher education institutions we will be
doomed to be the “workshop” of this globalised
world! The education system that just creates a
pool of workers for body shopping has a very short
shelf life. Sooner or later this constraint will
jeopardize our dreams of becoming a global
superpower. The regulatory system has failed us
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CCI gathering data on NSE’s predatory intent

The squabble between new stock exchange MCX-SX and
NSE, has reached the domain of the competition
regulator, with MCX-SX lodging a compliant with the

It will be interesting to see how the CCI deals with

this complaint. The process is more important as
well. This is a first case where there is a sectoral
regulator SEBI in place that regulates the activity
of these exchanges. Though, the matter of
predatory pricing lies squarely in the domain of
the Commission, the Competition Act stipulates
that CCI must work along with sector-specific
regulators. The way ahead is for the two
regulators to work in consultation with each other
in a cooperative manner.
On the substantive issue under consideration the
CCI will have to make a much nuanced judgment,
as predatory pricing is very hard to prove. Abuse
of Dominance is possible in this case.

Government to start 3G auction on February 25
The government has decided to go ahead with the
auction of three slots of third generation (3G) spectrum
for all 22 telecom circles on February 25.

From the very beginning revenue maximization

has been the objective of theses auctions. While
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we have been supporting this agenda as spectrum

is a public resource and the public should get the
true value of the spectrum, there are many
technical issues that the auction has not
ITU has identified 2x60 MHz of spectrum at 2.1
GHz to 3G services using W-CDMA. 2x10 MHz or
2x15 MHz assignment per operator is required for
effective deployment of 3G services - with one set
of 5 MHz carriers used for macro-cells, another for
micro-cells and a third for in-building coverage.
Only with this increased assignment is it possible
to deal effectively with the traffic hotspots of the
kind which airports and shopping malls generate!
Thus while 2x5 MHz may be a starting point, it is
important to identify and reserve additional
spectrum for 3G to ensure effective deployment of
3G in India.
Moreover, the loss to the consumer due to the
delay in these auctions is not measurable, as we
write this we hear the auctions have been
postponed further to August 2010!


Govt to pass Right to Food Act for inclusive
growth: FM
Finance minister Pranab Mukherjee has said that the
government will pass the Right to Food law to promote
inclusive growth.

Without a well functioning de-centralized Public

distribution system, the Right to Food may be like
any other “right”. Also it is important that this
right is broad based given the problems of
identifying the poor and the fact that malnutrition
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is rampant.

UMPPs to single company capped at three

The government has decided that one company can only
implement up to three ultra mega power projects or
UMPPs at any point in time.

Capping may not be the solution as what is

important is speedy roll out. Competition concerns
can be met at an appropriate time, but capping at
this stage may lead to inefficient entry!

PNGRB has no power to grant city gas licences: HC

The Delhi High Court has ruled that the Petroleum and
Natural Gas Regulatory Board (PNGRB) had no powers
to issue licences for retailing CNG and piped gas in cities
and authorisations issued till now were not valid.

Legally this may be right. This again goes to show

the lack of regulatory philosophy that plagues
regulatory institutions in India. If the electricity
regulator has the licensing power, then why not
the gas or the telecom regulator?

Government takes first step towards new oil

exploration policy
India’s hydrocarbons regulator has invited offers to
develop a publicly available database on oil and natural
gas that would help explorers bid for potential reserves
without having to wait for state auctions.

A good idea as the database is a public good on

geological and geochemical characteristics, a key
information input for those looking for potential
hydrocarbon reservoirs. This data base reduces
information asymmetry and improves the bidding
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Edited by: Payal Malik
Indicus Analytics, An Economics Research Firm

Insulin overpricing: DoT may prohibit M&As
regulator says its hands among 3G players
are tied If these rules come to play
National Pharmaceutical post 3G auction, then an
Pricing Authority (NPPA) existing telecom players
has said that it could not who win 3G licences, will
take any action against not be able to merge with
some producers for selling any other telecom operator.
human insulin above the
regulator-set prices
because the Karnataka High
Court has restrained any
India Inc may soon be Panel seeks strict
trading energy-saving regulation of rating
certificates agencies
The Government is A committee appointed by
readying the blueprint for a financial regulators has
new market-based recommended an overhaul
mechanism that will use of regulatory norms
energy saving certifications governing credit rating
to spur efficiency agencies (CRAs).
improvements across large,
energy-intensive industries.
Green Tribunal in the More funds for social
offing sector
The Government proposes Despite rising fiscal deficit,
to set up a National Green the government will make
Tribunal, a special court to social sector spending the
settle environmental cases. centrepiece of Budget
2010-11. To pay for this,
more disinvestment of
state-run enterprises would
become necessary.
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Government to sell National Knowledge

stakes in 60 PSUs network gets Cabinet
Finance ministry is in talks nod
with other ministries for The government has
selling stakes in around 60 approved a scheme, which
PSUs in coming years, aims at bridging the rural-
including miner Hindustan urban divide and also
Copper Ltd. accorded an in-principle
approval for the
establishment of the
National Knowledge
Rajasthan amends APMC Oil & gas regulator slaps
Act to start private e notice on Centre, PSUs
market on fuel pricing
Rajasthan has amended its The oil & gas sector
Agriculture Produce regulator has sent notices
Marketing Committee to the government and
(APMC) Act to allow private state-run oil companies for
sub e market to operate in selling petrol and diesel
all the 125 mandis of the below the cost following the
state. directions of an appellate
Undercutting cloud over Rural job generation to
highway project bidding get PPP push
The National Highways After the infrastructure
Authority of India (NHAI) sector, the public-private
may face a problem of partnership (PPP) model will
plenty when the final bids be extended to rural job
come from private generation as well.
companies for the 60
projects it intends to kick