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Economic Policy News And Views February 2010
Economic Policy News And Views February 2010
Economic Policy News And Views February 2010
Economic Policy News And Views February 2010
Economic Policy News And Views February 2010
Economic Policy News And Views February 2010
Economic Policy News And Views February 2010
Economic Policy News And Views February 2010
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Economic Policy News And Views February 2010

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EDUCATION …

EDUCATION
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 indeed!




REGULATION
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 watchdog.
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.

TELECOM
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 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 addressed.
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!

NEWS WITH ANNOTATES
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 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

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  • 1. Indicus Analytics, An Economics Research Firm http://indicus.net/Research/Home/Research%20Area/Policy%20and%20Institutional%20Analysis/ Policy News & Views Volume 2, Issue 2, February 2010 http://www.indicus.net/Newsletter/Policy_News_Views.aspx
  • 2. Indicus Analytics, An Economics Research Firm http://indicus.net/Research/Home/Research%20Area/Policy%20and%20Institutional%20Analysis/ EDUCATION 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 indeed! http://www.indicus.net/Newsletter/Policy_News_Views.aspx
  • 3. Indicus Analytics, An Economics Research Firm http://indicus.net/Research/Home/Research%20Area/Policy%20and%20Institutional%20Analysis/ http://www.indicus.net/Newsletter/Policy_News_Views.aspx
  • 4. Indicus Analytics, An Economics Research Firm http://indicus.net/Research/Home/Research%20Area/Policy%20and%20Institutional%20Analysis/ REGULATION 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 watchdog. 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. TELECOM 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 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 addressed. 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 http://www.indicus.net/Newsletter/Policy_News_Views.aspx
  • 5. Indicus Analytics, An Economics Research Firm http://indicus.net/Research/Home/Research%20Area/Policy%20and%20Institutional%20Analysis/ Edited by: Payal Malik payal@indicus.net http://www.indicus.net/Newsletter/Policy_News_Views.aspx
  • 6. Indicus Analytics, An Economics Research Firm http://indicus.net/Research/Home/Research%20Area/Policy%20and%20Institutional%20Analysis/ http://www.indicus.net/Newsletter/Policy_News_Views.aspx
  • 7. Indicus Analytics, An Economics Research Firm http://indicus.net/Research/Home/Research%20Area/Policy%20and%20Institutional%20Analysis/ MORE NEWS 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 action. 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. Government to sell National Knowledge stakes in 60 PSUs network gets Cabinet Finance ministry is in talks nod http://www.indicus.net/Newsletter/Policy_News_Views.aspx
  • 8. Indicus Analytics, An Economics Research Firm http://indicus.net/Research/Home/Research%20Area/Policy%20and%20Institutional%20Analysis/ http://www.indicus.net/Newsletter/Policy_News_Views.aspx

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