A CII-PriceWaterhouseCoopers report stated that policy interventions shouldnot extend to the operational matters of such authorities.

There should also be financial autonomy of the regulatory authorities in themedium term through an independent funding source, states the report `Anoverview of the challenges for infrastructure development in India', whichwas released during Infranet '99 on Thursday.

Fees from the regulated entities is the best possible source of revenuethough care must be taken to ensure that the fees are in proportion to thevolume of operations and not in the manner of a tax, suggests the report.

Stating that a good start has been made in revamping the regulatoryframework for infrastructure services, especially in the more commerciallyoriented sectors like power and telecom, the report emphasises on the needto strengthen the autonomous regulatory bodies in each sector.

Progress in areas like core urban infrastructure continues to be hampered bythe lack of an appropriate regulatory and institutional framework governingprivate participation.

"The friction between TRAI and the ministry of communications has raisedserious questions about the scope of powers of the regulatory bodies", thereport adds.

As the process of private participation in infrastructure gains momentum,institutional reforms will also emerge as a necessary condition for theemergence of truly competitive market structures and the consequentimprovements in efficiency and benefits to consumers.

The package of institutional reforms, therefore, must not only be tailoredto the characteristics of each infrastructure sector but must also bebroad-based, covering human skills, organisation and corporate structure aswell as systems and processes.

Regarding tariff reforms, the move to more competitive markets ininfrastructure services will thus have to be preceded by a broad programmeof tariff reforms covering all core sectors.

Accountability on part of the regulators should be simultaneouslyestablished through provisions for annual audits and scrutiny by thelegislature.

For increasing the flow of funds to the infrastructure sector, it isimperative that the demand for long-term debt instruments in the economy beincreased, said the report.

The reports suggests that given the relatively low penetration ofcontractual savings in India and the natural choice of contractual savingsinstitutions as investors in infrastructure debt, the highest priority mustbe given in introducing reforms in the pension and provident funds sector.