Pant calls for corrective steps in freight equalisation policy

By Our Special Correspondent

NEW DELHI, DEC. 6. The Deputy Chairman, Planning Commission, Mr. K. C. Pant, today said corrective steps were warranted in the freight equalisation policy which had resulted in certain distortions adversely affecting economic growth and development.

These corrective steps, along with the establishment of the much- needed independent regulators to guide and market transportation activities, were needed to provide impetus for faster economic growth as a pure market approach would not work in the case of transportation, Mr. Pant said while inaugurating a meet on `` Transport Pricing and Charges for Promoting Sustainable Development.''

Mr. Pant said that just as a purely market approach would not enable the country to meet challenges concerning the field of transportation, past experience had shown that a purely Governmental approach would also not suffice entirely. At the same time, the absence of connectivity could not be cured simply by subsidising prices.

The real issue, he said, was whether there should be different regulators for different forms of transport, or a single regulator who could look at the transport activity in totality. It would, therefore, be imperative to go into the pros and cons of different regulatory structures before taking a final view in the matter.

Special care would be needed for determining the terms of reference of the regulator. Similarly, decisions regarding geographical dispersion of transport facilities, particularly in the public domain, would have to be taken by the Government with utmost care. The issue of inter-regional balance which had been a matter to concern too would have to tackled although freight equalisation had been made a traditional instrument to address this problem. But this had led to serious distortions in the existing transport policy.

While emphasising that the magnitude and the manner in which cross-subsidies were given called for a careful consideration, he said he was of the view that there was definite need for considering differential pricing with caution as there had been too many cases where poorly designed cross-subsidies schemes had not only adversely affected the efficiency of the sector but also had negative effects on inter-generational and inter-regional equity.

Mr. Pant said that although India had transformed itself into one of the 10 fastest growing economies of the world, gaps still remained and an ``unfinished agenda lies ahead.'' At the top of this agenda was the task of ensuring that reforms picked up momentum, spread across the country and disseminated benefits visibly to the poor sections of the people.

He also chose to sound a note of caution when he said that efforts should be made to ensure that while attempting to improve the quality of life of the present generation, undue burden was not placed on the future generations.

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